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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to
_____________

Commission File Number:0-30695

ARVANA INC.(Exact name of
registrant as specified in its charter)

|NEVADA                         | 87-0618509         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

Suite 2610, 1066 West Hastings Street, Vancouver, BC V6E
3X2(Address of principal executive offices) (Zip Code)

604-684-4691(Issuers telephone number)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act: Common
  Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  
]    No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  
]    No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes
[X]    No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):

|Large accelerated filer [   ] | Accelerated filer [   ] | Non-accelerated filer [   ]                         | Smaller reporting company [X]
|----------------------------- | ----------------------- | --------------------------------------------------- | -----------------------------
|                              |                         | (Do not check if a smaller reporting
      company) |                              

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). Yes [X]    No [ 
 ]

The aggregate market value of the common stock held by
nonaffiliates of the registrant (20,546,750 shares) based on the $0.01
closing price of the registrant's common stock as reported on the OTCBB on
June 30, 2008, was approximately $205,468. For purposes of this computation,
all officers, directors and 10% beneficial owners of the registrant are deemed
to be affiliates. Such determination should not be deemed to be an admission
that such officers, directors or 10% beneficial owners are, in fact,
affiliates of the registrant.

As of April 28, 2009, there were 21,202,375outstanding
shares of the registrant's common stock.

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ITEM 1.       
DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-K contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements involve risks and uncertainties,
including statements regarding our capital needs, business plans and
expectations. Such forward-looking statements involve risks and uncertainties
regarding our planned business, availability of funds, government regulations,
common share prices, operating costs, capital costs, our ability to deploy our
planned business and generate revenues and other factors. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. These
statements are based on certain assumptions and analyses made by our management
in light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors they
believe are appropriate in the circumstances. Actual events or results may
differ materially. In evaluating these statements, you should consider various
factors, including the risks outlined below, and, from time to time, in other
reports we file with the SEC. These factors may cause our actual results to
differ materially from any forward-looking statement. We disclaim any obligation
to publicly update these statements, or disclose any difference between its
actual results and those reflected in these statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements.

Overview

Until the end of 2007 our business operations were focused on
the telecommunications industry. In December 2007 we decided to exit the
telecommunications industry and disposed of our German subsidiary Hallotel. We
are currently in the process of evaluating other industries and business
opportunities in order to determine the focus of our future business
opportunities. There can be no guarantee that we will be successful in
identifying suitable business opportunities, or if we are able to identify
suitable business opportunities, that we will able to find an adequate source of
financing to acquire any business or business assets, and commence operations,
or that those operations, if commenced, will be successful in generating
profits.

Hallotel is a German based telecommunications service provider
that is focused on the provision of long distance telephone calls between
Germany, Austria, Switzerland and Turkey. Hallotel was acquired by us on August
23, 2006 and disposed of on December 7, 2007. Prior to the acquisition of
Hallotel we were engaged in the telecommunications industry through our
subsidiary Arvana Networks. Arvana Networks was planning to provide voice over
the internet (VoIP) telephone technology services, primarily in Brazil, and was
in the startup phase of its operations since March, 2005. With the acquisition
of the Hallotel operation in 2006 and the limitation of funds, the plans to
develop Arvana Networks as a provider of Internet services were put on hold in
2006 and abandoned in 2007.

Corporate Organization

We were incorporated under the laws of the State of Nevada on
June 16, 1977. Our authorized capital is comprised of 100,000,000 shares of
common stock, par value of $0.001.

Subsidiaries

We operate through our wholly-owned subsidiaries which include
the following:

| | 1. | Arvana Networks Inc., a company incorporated in Barbados
      in January, 2005.                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                           
| | 2. | Arvana Participações S.A., a company incorporated in
      Brazil in April, 2005 and its subsidiary Arvana Comunicações. S.A., both
      subsidiaries of Arvana Networks.

Acquisition of Arvana Networks

We acquired Arvana Networks in August, 2005 in a transaction
whereby we issued 4,500,000 shares of our common stock to the former
shareholders of Arvana Networks. Included in the 4,500,000 shares were 1,500,000
shares that were not considered issued for accounting purposes as the
consideration for those shares had not yet been received. In 2007, the 1,500,000
shares were returned to the Company and cancelled. Arvana Networks business
activities to date were directed towards market analysis, developing business
plans and searching out appropriate local partners in order to launch VoIP
telephone services in Rio de Janeiro, Sao Paulo and other major cities in Brazil
in 2006. We are no longer pursuing business in the telecommunications industry
and Arvana Networks and its subsidiaries are considered to be inactive.

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Acquisition of BCH Beheer and Hallotel

On August 9, 2006, we entered into a share purchase agreement with Brulex  Consultadoria Economica E Marketing Ltda. (Brulex), its subsidiary BCH Beheer, and its subsidiary Hallotel Deutschland GmbH (Hallotel) whereby
we agreed to acquire Hallotel through the acquisition of all of the outstanding shares of BCH Beheer from Brulex. We completed this transaction on August 23, 2006, and we paid to Brulex the following consideration for the purchase:

- the issuance of 3,541,700 shares of our common stock;
- the payment of 500,000 Euros in cash (equivalent to $639,700 based on an exchange rate of $1.00 per 0.7816 Euros); and
- the issuance of a promissory note in the amount of 250,000 Euros ($319,850).

In addition, we provided for an adjustment to the purchase price for certain payments made by Hallotel after October, 2005, and up to the closing date of August 23, 2006; 80,932 Euros ($103,544) for certain telephony technology hardware
purchased; and 277,630 Euros ($355,200) for actual commissions paid by Hallotel to its third party sales persons in respect of carrier pre-select sign-ups on net new customers. The total amount provided for in these adjustments is 358,562 Euros
($458,744) and is payable to Brulex.

On December 7, 2007, we entered into a settlement and share purchase agreement with Brulex to sell Hallotel back to Brulex. Under the terms of the agreement Brulex returned to the Company for cancellation the 3,541,700 of its common shares issued
for the acquisition of BCH Beheer and Hallotel. The shares were valued at $283,336 based on our common share price of $0.08 on December 7, 2007. The amounts due to Brulex under the terms of the original Acquisition were reduced by
$447,116 to 225,000. We also wrote off a receivable due from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The net effect of the transactions resulted in a loss of
$2,239,014 upon disposal of Hallotel. With the sale of Hallotel we had exited the telecommunications industry.

On December 30, 2008, the Company entered into a sale and purchase agreement with Nazleal S.A. to dispose of the Companys subsidiary, BCH Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts, obligations, and guarantees
of BCH Beheer as of December 30, 2008, totaling 40,334 ($56,145) and the Company will reimburse Nazleal S.A. 20,000 ($27,840) for assuming all of BCH Beheers liabilities. The Company also wrote off $8 in cash. The net
effect of the above transactions resulted in a gain of $28,297 upon disposal of BCH Beheer.

Our Plan of Operations

We exited the telecommunications industry at the end of 2007 and our present plan of operations for the next twelve months is to identify and evaluate industries and business opportunities in order to find a suitable business to enter into.

We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing obtaining financing in order to maintain operations while we evaluate potential businesses. Since
December 31, 2008 we have obtained loans totaling $25,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2009.

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2009. We had cash in the amount of $738 and a working capital deficit of $1,297,734 as
at December 31, 2008. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

Other than small advances from shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that
additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from
the sale of our common stock to fund our plan of operations. In addition, in order to obtain equity financing it may be necessary for us to consider a capital restructuring, which may or may not include a common stock reverse split. The board is
currently considering all avenues available to obtain financing.

Accordingly, we will require continued financial support from our shareholders and creditors until we are able to generate sufficient cash flow from operations on a sustained basis. There is substantial doubt that we will be successful at achieving
these results.

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Management Team

Teyfik Oezcan, the Chief Executive Officer of Hallotel, was
invited to join the Arvana board and was appointed President and Chief Executive
Officer on December 20, 2006. With the sale of Hallotel to Brulex, he resigned
as CEO and a director of Arvana and its subsidiaries on December 7, 2007.
Leonard Gordon resigned as Chief Financial Officer effective March 12, 2007.
Karen Engleson, our Corporate Secretary, was appointed Acting Chief Financial
Officer effective March 12, 2007. Ms Engleson resigned as an officer and
secretary on May 8, 2007.

Wayne Smith was appointed Chief Financial Officer, Corporate
Secretary and Treasurer on May 8, 2007 and Acting Chief Executive Officer on
December 7, 2007 with the resignation of Mr. Oezcan. Mr. Smith is a
self-employed financial consultant. In addition to his position with Arvana Inc,
Mr. Smith was the Chief Financial Officer, Secretary, Treasurer and a Director
from February 2, 2007 until December 15, 2008 of Xeno Transplants Corporation.
Xeno is a company engaged in the research and development of xenotransplantation
in the biotechnology industry that was publicly traded on the OTC Bulletin Board
and is currently traded on the Pink Sheets. Previously, Mr. Smith was the Chief
Operating Officer and Chief Financial Officer of Visiphor Corporation from July
2003 through January 2007. Visiphor is a software development and consulting
services company that was publicly traded on the OTC Bulletin Board and the TSX
Venture Exchange. Prior to those positions, he served as Visiphors Chief
Financial Officer from September 2002 to July 2003. Since 1997, Mr. Smith has
been a partner of TelePartners Consulting Inc., a consulting services company
that provides management and financial consulting services. Mr. Smith holds a
Chartered Accountant designation in Canada.

Research and Development Expenditures

The Company has not incurred any research and development
expenditures during 2008 or 2007.

ITEM 2.       
DESCRIPTION OF PROPERTIES.

We rent approximately 1300 square feet of office space at 1066
West Hastings Street in Vancouver, British Columbia, Canada, on a month-to-month
basis that we use for our principal executive offices. Our monthly rent payments
total $2,500 Canadian dollars.

ITEM 3.        LEGAL
PROCEEDINGS.

We currently are not a party to any material legal proceedings
and to our knowledge, no such proceedings are threatened or contemplated.

ITEM 4.        SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of our security holders,
through the solicitation of proxies or otherwise, during our fourth quarter
ended December 31, 2008.

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PART II

ITEM 5.        MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

Market Information

Our common shares are quoted on the OTC Bulletin Board under
the symbol AVNI and on the Frankfurt Stock Exchange under the symbol T5U.F. The
following table indicates the high and low bid prices of our common shares
during the periods indicated:

OTCBB:

| | QUARTER            |   | HIGH BID |  |   | LOW BID | 
| | ------------------ | - | -------- |  | - | ------- | 
| | ENDED              |   |          |  |   |         | 
| |                    |   |          |  |   |         | 
| | December 31, 2008  | $ | 0.02     |  | $ | 0.002   | 
| | September 30, 2008 | $ | 0.02     |  | $ | 0.01    | 
| | June 30, 2008      | $ | 0.075    |  | $ | 0.005   | 
| | March 31, 2008     | $ | 0.03     |  | $ | 0.005   | 
| | December 31, 2007  | $ | 0.15     |  | $ | 0.06    | 
| | September 30, 2007 | $ | 0.15     |  | $ | 0.10    | 
| | June 30, 2007      | $ | 0.30     |  | $ | 0.10    | 
| | March 31, 2007     | $ | 0.35     |  | $ | 0.08    | 

FRANKFURT (in Euros):

| | QUARTER            |  | HIGH BID |  |  | LOW BID | 
| | ------------------ |  | -------- |  |  | ------- | 
| | ENDED              |  |          |  |  |         | 
| |                    |  |          |  |  |         | 
| | December 31, 2008  |  | 0.014    |  |  | 0.001   | 
| | September 30, 2008 |  | 0.02     |  |  | 0.001   | 
| | June 30, 2008      |  | 0.04     |  |  | 0.001   | 
| | March 31, 2008     |  | 0.018    |  |  | 0.001   | 
| | December 31, 2007  |  | 0.06     |  |  | 0.03    | 
| | September 30, 2007 |  | 0.10     |  |  | 0.05    | 
| | June 30, 2007      |  | 0.10     |  |  | 0.06    | 
| | March 31, 2007     |  | 0.26     |  |  | 0.08    | 

The source of the high and low bid information for the OTCBB is
the NASD OTC Bulletin Board. The market quotations provided reflect inter-dealer
prices, without retail mark-up, markdown or commission and may not represent
actual transactions.

Holders of Common Stock

As at April 28, 2009, we had 21,202,375 shares of common stock
issued and outstanding and there were 55 registered holders based on the records
of the Companys transfer agent. The registered holders do not include
beneficial owners of the Company's common shares whose shares are held in the
names of various securities brokers, dealers and registered clearing agencies.

Dividends

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

|1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      shareholders who have preferential rights superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

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Recent Sales of Unregistered Securities

During the quarter ended December 31, 2008, there were no sales
of securities.

Small Business Issuer Purchases of Equity Securities

During the quarter ended December 31, 2008, there were no
purchases of equity securities effected by the Company or any affiliated
purchasers.

ITEM 7.       
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion of our financial condition, changes in
financial condition and results of operations for the year ended December 31,
2008 should be read in conjunction with our audited consolidated financial
statements and related notes for the year ended December 31, 2008.

Presentation of Financial Information

Our financial statements for the year ended December 31, 2008
include the accounts of:

- Arvana Networks;
- Arvana Par;
- Arvana Com;
- BCH Beheer up to the disposal date of December 30, 2008;
- Hallotel Deutschland GmbH up to the disposal date of December 7, 2007.

The accounts of BCH Beheer and Hallotel are included in our
statements of operations and statements of cash flows from August 23, 2006,
being the date of closing of our acquisition of BCH Beheer and Hallotel, through
December 30, 2008 for BCH Beheer and December 7, 2007 for Hallotel. Our results
of operations presented below do not include the results of operations of BCH
Beheer after December 30, 2008 or Hallotel after December 7, 2007.

Results of Operations

References in the discussion below to 2008 are to our fiscal
year ended December 31, 2008. Similarly, references to 2007 are to our fiscal
year ended December 31, 2007. References to 2009 are to our current fiscal year
that will end December 31, 2009.

Our operations for the years ended December 31, 2008 and 2007
are summarized below. The results of operations for the year ended December 31,
2007 are from our telecommunications industry business. We are no longer in the
telecommunications industry.

Year ended December 31,
      2008
    Year ended December 31,
      2007Revenues
    $0
    $4,740,895Costs of
      Sales
    $0
    ($3,654,429)Gross
      profit
    $0
    $1,086,466Operating
      Expenses:Selling and promotion
    $0
    $67,329General and Administration
    $271,443
    $1,117,090Depreciation
    $299
    $198,405Foreign exchange (gain) loss
    $(62,745)
    $111,501Other
      Items:Stock
      Based Compensation
    $528,800
    $662,800Loss
      on write-off of equipment
    $0
    $37,196Loss
      on bad debt expense
    $0
    $58,411Loss
      on disposal of Hallotel
    $0
    $2,239,014Gain
      on disposal of BCH Beheer
    $28,297
    $0


---

Other
      income
    $0
    $9,425Gain
      on debt settlement
    $0
    $75,000Income
      taxes
    $0
    $54,535Other comprehensive income (losses)
    $0
    $13,790Comprehensive
      Loss for the Period
    $709,500
    $3,361,600


Revenues

All of our revenues are attributable to the services provided
by our former subsidiary, Hallotel, up to the disposal date of December 7, 2007.
We did not generate any revenues during the period prior to our acquisition of
Hallotel or during the period after our disposal of Hallotel and did not
generate any revenues outside of our former Hallotel business. We presently do
not earn revenues and will not earn revenues until we enter into another
business, and there can be no assurance that we will earn revenues at that time.

Cost of Sales

All of our costs of sales are attributable to costs of sales
incurred by our former Hallotel business in connection with providing its
services. We currently do not incur costs of sales.

Gross Profits

All of our gross profits were attributable to our former
Hallotel business. We currently do not generate gross profits.

Sales and Promotion Expenses

Sales and promotion expenses consist primarily of commissions
paid to third parties in connection with our former Hallotel business. We
currently do not incur sales and promotion expenses.

Administration Expenses

Administrative expenses are comprised of costs associated with
management compensation, office overhead including rent, legal fees, and
consulting services. The decrease in our administrative expenses for the year
ended December 31, 2008 compared to December 31, 2007 is due to the disposal of
Hallotel which generated a majority of our previous general and administrative
expenses.

Foreign Exchange Gains (Losses)

Foreign exchange gains and losses are associated with exchange
rate changes affecting the Companys payables and loans that are based in Euros
and Canadian dollars.

Stock-based Compensation

In June 2006, we awarded 1,600,000 stock options to a number of
directors, management and consultants. The stock options have an exercise price
of $1.25 per share which was the current market value of the shares at the time.
As a result of this program, we have recorded an expense of $1,424,000 in
stock-based compensation expense over the vesting period of the options. The
Company recorded an expense of $528,800 in 2008 and $662,800 in 2007 for the
pro-rated portion of the full charge.

Loss on the write-off of equipment

In fiscal 2007, we recorded a loss on the write-off of
equipment in the amount of $37,196 which was attributable to the net write-off
of equipment owned by Arvana Comunicacoes.

Loss on disposal of Hallotel

On December 7, 2007, the Company entered into a settlement and
share purchase agreement with Brulex to dispose of the Companys subsidiary,
Hallotel. Under the terms of the agreement Brulex returned to the Company for
cancellation the 3,541,700 of its common shares issued for the acquisition of
BCH Beheer and Hallotel. The shares were valued at $283,336 based on the
Companys common share price of $0.08 on December 7, 2007. The amounts due to
Brulex under the terms of the original Acquisition were reduced by $447,116,
which consisted of accounts payable of $338,236 and note payable of $108,880, to
€225,000. The Company wrote off a receivable due

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from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The original investment in Hallotel by the Company of $2,948,003 was adjusted by the effect of Hallotels operations from
acquisition to disposal resulting in a net decrease in the Companys retained earnings of $74,455 and an accumulated other comprehensive loss of $43,099. The net effect of the above transactions resulted in a loss of $2,239,014 upon
disposal of Hallotel.

Gain on disposal of BCH Beheer

On December 30, 2008, the Company entered into a sale and purchase agreement with Nazleal S.A. to dispose of the Companys subsidiary, BCH Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts, obligations, and guarantees
of BCH Beheer as of December 30, 2008, totaling 40,334 ($56,145) and the Company will reimburse Nazleal S.A. 20,000 ($27,840) for assuming all of BCH Beheers liabilities. The Company also wrote off $8 in cash. The net
effect of the above transactions resulted in a gain of $28,297 upon disposal of BCH Beheer.

Net Loss for the Period

We incurred a net loss of $709,500 for the year ended December 31, 2008 compared with a net loss of $3,375,390 in 2007. The majority of the loss in 2007 was related to the loss on disposal of our Hallotel business.

Liquidity and Capital Resources

As at December 31, 2008, we had cash of $738 and a working capital deficit of $1,297,734. This compares to cash of $2,913 and working capital deficit of $1,117,333 as at December 31, 2007.

Plan of Operations

We exited the telecommunications industry at the end of 2007 and our present plan of operations for the next twelve months is to identify and evaluate industries and business opportunities in order to find a suitable business to enter into.

We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing obtaining financing in order to maintain operations while we evaluate potential businesses. Since
December 31, 2008 we have obtained loans totaling $25,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2009.

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2009. We had cash in the amount of $738 and a working capital deficit of $1,297,734 as
at December 31, 2008. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

During the next twelve month period, we anticipate that our revenues will not exceed our operating expenses. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. Other than small advances from
shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund
our plan of operations. In addition, in order to obtain equity financing it may be necessary for us to consider a capital restructuring, which may or may not include a common stock reverse split. The board is currently considering all avenues
available to obtain financing.

Cash Used in Operating Activities

We used cash in operations in the amount of $240,129 during fiscal 2008, as compared to $616,700 during fiscal 2007. Cash used in operations for the two periods is not considered to be comparable due to the significant difference in the
operations of the Company during the two periods. Cash used in operations during the year ended December 31, 2008 was attributable primarily to payments for administrative expenses.

Cash Used in Investing Activities

We did not use cash in investing activities during the year ended December 31, 2008. In the year ended December 31, 2007 cash of $139,354 was used by our former subsidiary Hallotel. Of this amount, $89,920 was attributable to the acquisition
of equipment, a recovery of $3,702 from proceeds of the sale of equipment and $53,136 was cash held by Hallotel at the date of disposal.

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Cash Flows from Financing Activities

The Company obtained $237,954 from financing activities during fiscal 2008. The Company received $230,975 from unsecured loans bearing 6% interest per annum. The Company also increased its indebtedness to related parties during the year by
$6,979. In fiscal 2007 the Company received $360,672 from unsecured loans bearing 6% interest per annum and received advances of $150,966 from related parties.

Amounts due to IP Horizon LLC

Arvana Networks had an agreement with IP Horizon LLC (IPH), whereby IPH was issued 1,500,000 shares in exchange for a commitment to deliver equipment, software and network hardware for the initial launching of VoIP service in Brazil.

As at December 31, 2006, the Company had not received the full complement of assets to be acquired in connection with this transaction or other consideration. Accordingly, the 1,500,000 shares were not reflected on our financial statements as having
been issued. In 2007 the following agreement was reached with IPH with respect to this transaction:

IPH returned to the Company for cancellation the 1,500,000 common shares of Arvana issued to IPH in August 2005.

IPH had contributed certain equipment to, and had developed certain software for, the Company, with an agreed upon value of $150,000. In settlement of the debt due from the contribution of the aforementioned equipment and software architecture
services from IPH to Arvana and Arvana Networks, we entered into a Regulation D Debt Conversion Agreement dated effective March 28, 2007 with Arvana Networks Inc. and IPH, a copy of which was filed with our current report on Form 8-K filed with the
SEC on May 4, 2007. Our board of directors approved the issuance of the 500,000 new shares to IPH on May 1, 2007, which shares are subject to a two year contractual hold period. Due to a delay in processing, the original 1,500,000 shares were
returned to treasury and cancelled during the third quarter of fiscal 2007 and the 500,000 debt settlement shares were issued during the third quarter of fiscal 2007.

Going Concern

For the year ended December 31, 2008, the Company incurred a loss from operations of $709,500. At December 31, 2008, the Company had a working capital deficiency of $1,297,734. These conditions raise substantial doubt about the
Companys ability to continue as a going concern. Since inception of the Company we have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operations. For these reasons our auditors stated in
their report on our audited financial statements that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or
other financing to fund our plan of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that are material to stockholders.

Critical Accounting Policies

Basis of Presentation

We are currently in the development stage and present our financial statements in accordance with Statement of Financial Accounting Standard (SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises.

Our financial statements include the accounts of the Company, its wholly-owned subsidiaries Arvana Networks, Arvana Par, Arvana Com and its former wholly owned subsidiaries BCH Beheer up to December 30, 2008 and Hallotel up to December 7, 2007. All
significant inter-company transactions and balances have been eliminated.

---

Foreign currency translation and transactions

Our functional currency is the United States dollar.

The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the transaction date.
Revenue and expenses are translated at the average rates of exchange prevailing during the periods.

The Company used the current rate method when translating its former German subsidiary operations Hallotel. All assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the balance
sheet date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods. The cumulative effects of these translation adjustments are presented as a component of comprehensive income.

Transactions conducted in foreign currencies are recorded using the exchange rate in effect on the transaction date. At the period end, monetary assets and liabilities are translated to the functional currency of each entity using the exchange rate
in effect at the period end date. Transaction gains and losses are recorded in foreign exchange gain or loss.

Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Stock-based Compensation Expense

The Company accounts for all stock-based payments to employees and non-employees under SFAS No.123R, Accounting for Stock-Based Compensation, using the fair value based method. Under the fair value method, stock-based payments are
measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and
non-forfeitable at the grant date is measured and recognized at that date. We granted stock options in June 2006 and have recorded an expense of $1,424,000 in stock-based compensation expense over the vesting period of the options. The Company
recorded an expense of $528,800 in 2008 and $662,800 in 2007 for the prorated portion of the full charge.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how
fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years.

FASB Staff Position 157-2 (FSP FAS 157-2) delayed the effective date of FAS 157 until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years, for all non-financial assets and non-financial
liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company adopted FAS 157 on January 1, 2008, and utilized the one year deferral for non-financial
assets and non-financial liabilities that was granted by FSP FAS 157-2. The adoption of FAS 157 did not have a material impact on the Companys consolidated financial statements.

In February, 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The adoption of FAS 159 did not have a material impact on
the Companys consolidated financial statements.

In March 2008, the FASB issued FAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161). FAS 161 changes the disclosure requirements for derivative instruments and hedging activities by requiring
enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FAS 133, and how derivative instruments and related hedged items affect an entitys
operating results, financial position, and cash flows. FAS 161 is effective for fiscal years beginning after November 15, 2008. Early adoption is permitted. The Company is currently reviewing the provisions of FAS 161 and has not yet adopted the
statement. However, as the provisions of FAS 161 are only related to disclosure of derivative and hedging activities, the Company does not believe the adoption of FAS 161 will have a material impact on its consolidated operating results, financial
position, or cash flows.

---

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of the position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the
period of expected cash flows used to measure the fair value of the intangible asset. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. We are assessing the potential impact that the adoption of FSP FAS 142-3 may have on
our consolidated financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles or SFAS No. 162. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation
of financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement shall be effective 60 days following the Securities and Exchange Commissions approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not believe that implementation of this standard will have a material impact on our consolidated financial position,
results of operations or cash flows.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based payment
awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 is
effective for fiscal years beginning after December 15, 2008. Management has determined that the adoption of FSP EITF 03-6-1 will not have an impact on the Financial Statements.

The Company does not expect that the adoption of these new accounting pronouncements will have a significant effect on its financial statements.

---

ITEM 8.        FINANCIAL
STATEMENTS.

Our audited financial statements for the year ended December
31, 2008, as set forth below, are included with this Annual Report on Form 10-K.
Our audited financial statements are prepared on the basis of accounting
principles generally accepted in the United States and are expressed in U.S.
dollars.

|                                                                                                                                                                                                                  | **PAGE**
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                                                                                                                  |         
|Auditors Report                                                                                                                                                                                                  | 13      
|                                                                                                                                                                                                                  |         
|Consolidated Balance Sheets,
      December 31, 2008 and 2007                                                                                                                                                     | 14      
|                                                                                                                                                                                                                  |         
|Consolidated Statements
      of Operations for the years ended December 31, 2008 and 2007 and cumulative
      amounts from the beginning of the development stage on January 1, 2005 to
      December 31, 2008 | 15      
|                                                                                                                                                                                                                  |         
|                                                                                                                                                                                                                  |         
|Consolidated Statements
      of Cash Flows for the years ended December 31, 2008 and 2007 and cumulative
      amounts from the beginning of the development stage on January 1, 2005 to
      December 31, 2008 | 16      
|                                                                                                                                                                                                                  |         
|Consolidated Statements
      of Changes in Stockholders Equity for the years ended December 31,
      2008 and 2007                                                                                             | 17      
|                                                                                                                                                                                                                  |         
|Notes to Consolidated Financial
      Statements                                                                                                                                                                  | 18      

---



REPORT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of 
Arvana, Inc. and subsidiaries (A Development Stage Company)



We have audited the accompanying consolidated balance sheets of Arvana, Inc. and subsidiaries (A Development Stage Company) as at December 31, 2008 and 2007 and the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficiency) and cash flows for the years then ended and for the period from the beginning of the development stage on January 1, 2005 to December 31, 2008.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended and for the period from the beginning of the development stage on January 1, 2005 to December 31, 2008 in conformity with generally accepted accounting principles in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company has minimal assets is dependent upon financing to continue operations has suffered recurring losses from operations and has working capital deficit as of December 31, 2008.  These matters raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans in regards to these matters are discussed in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

|                  | DAVIDSON & COMPANY LLP
|----------------- | ------------------------
|                  |                         
|Vancouver, Canada | Chartered Accountants   
|                  |                         
|April 24, 2009    |                         

1200  609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6 Telephone
(604) 687-0947 Fax (604) 687-6172

---

ARVANA INC. AND SUBSIDIARIES(A DEVELOPMENT
STAGE COMPANY) CONSOLIDATED BALANCE SHEETS (EXPRESSED IN US DOLLARS)

|                                                                                       |   | December 31, |   |   | December 31, |  
|-------------------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                                       |   | 2008         |   |   | 2007         |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|ASSETS                                                                                 |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|Current                                                                                |   |              |   |   |              |  
|Cash                                                                                   | $ | 738          |   | $ | 2,913        |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   | 738          |   |   | 2,913        |  
|                                                                                       |   |              |   |   |              |  
|Long-term                                                                              |   |              |   |   |              |  
|Property and equipment (Note 6)                                                        |   | 403          |   |   | 702          |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       | $ | 1,141        |   | $ | 3,615        |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|LIABILITIES AND STOCKHOLDERS'
      DEFICIENCY                                         |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|Current                                                                                |   |              |   |   |              |  
|Accounts payable and accrued
      liabilities                                         | $ | 360,275      |   | $ | 340,122      |  
|Note payable                                                                           |   | 167,040      |   |   | 220,935      |  
|Amounts due to related parties
      (Note 7)                                          |   | 196,482      |   |   | 198,517      |  
|Loans Payable
      (Note 7)                                                           |   | 574,675      |   |   | 360,672      |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   | 1,298,472    |   |   | 1,120,246    |  
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   |              |   |   |              |  
|Stockholders' deficiency                                                               |   |              |   |   |              |  
|Common stock
      (Note 8)                                                            |   |              |   |   |              |  
|100,000,000
      common shares authorized at $0.001 par value;                        |   |              |   |   |              |  
|21,202,375 common shares issued and outstanding (December 31, 2007 -
      21,202,375) |   | 21,203       |   |   | 21,203       |  
|Additional paid-in capital                                                             |   | 21,426,301   |   |   | 20,897,501   |  
|Deficit                                                                                |   | (95,331      | ) |   | (95,331      | )
|Deficit accumulated during the
      development stage                                 |   | (22,366,168  | ) |   | (21,656,668  | )
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   | (1,013,995   | ) |   | (833,295     | )
|Less: Treasury
      stock - 3,541,700 common shares (December 31, 2007 - 3,541,700)   |   | (283,336     | ) |   | (283,336     | )
|                                                                                       |   |              |   |   |              |  
|                                                                                       |   | (1,297,331   | ) |   | (1,116,631   | )
|                                                                                       |   |              |   |   |              |  
|                                                                                       | $ | 1,141        |   | $ | 3,615        |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

ARVANA INC. AND SUBSIDIARIES(A DEVELOPMENT STAGE
COMPANY)CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(EXPRESSED IN US DOLLARS)

|                                                           |   |                    |   |   |                      |   |   | Cumulative amounts        |  
|---------------------------------------------------------- | - | ------------------ | - | - | -------------------- | - | - | ------------------------- | -
|                                                           |   |                    |   |   |                      |   |   | from the beginning of the |  
|                                                           |   | For the year ended |   |   | development stage on |  
|                                                           |   | December 31,       |   |   | January 1, 2005 to   |  
|                                                           |   | 2008               |   |   | 2007                 |   |   | December 31, 2008         |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Sales                                                      | $ | -                  |   | $ | 4,740,895            |   | $ | 7,573,714                 |  
|Cost of sales                                              |   | -                  |   |   | (3,654,429           | ) |   | (5,896,638                | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Gross profit                                               |   | -                  |   |   | 1,086,466            |   |   | 1,677,076                 |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Operating expenses                                         |   |                    |   |   |                      |   |   |                           |  
|Selling and promotion                                      |   | -                  |   |   | (67,329              | ) |   | (188,078                  | )
|General and administrative                                 |   | (271,443           | ) |   | (1,117,090           | ) |   | (3,712,064                | )
|Research and development                                   |   | -                  |   |   | -                    |   |   | (170,083                  | )
|Depreciation                                               |   | (299               | ) |   | (198,405             | ) |   | (270,021                  | )
|Foreign exchange
      gain (loss)                         |   | 62,745             |   |   | (111,501             | ) |   | (208,085                  | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Operating loss                                             |   | (208,997           | ) |   | (407,859             | ) |   | (2,871,255                | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Other items                                                |   |                    |   |   |                      |   |   |                           |  
|Stock-based compensation                                   |   | (528,800           | ) |   | (662,800             | ) |   | (9,837,290                | )
|Loss on write-off
      of equipment                       |   | -                  |   |   | (37,196              | ) |   | (67,798                   | )
|Loss on acquisition of Arvana Networks                     |   | -                  |   |   | -                    |   |   | (7,013,310                | )
|Loss on acquisition
      of Arvana Com                    |   | -                  |   |   | -                    |   |   | (279,037                  | )
|Loss on bad debt expense                                   |   | -                  |   |   | (58,411              | ) |   | (58,411                   | )
|Loss on disposal
      of Hallotel                         |   | -                  |   |   | (2,239,014           | ) |   | (2,239,014                | )
|Gain on disposal of BCH Beheer                             |   | 28,297             |   |   | -                    |   |   | 28,297                    |  
|Other income                                               |   | -                  |   |   | 9,425                |   |   | 9,425                     |  
|Gain on debt settlement                                    |   | -                  |   |   | 75,000               |   |   | 75,000                    |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Net loss before income taxes                               |   | (709,500           | ) |   | (3,320,855           | ) |   | (22,253,393               | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Income taxes                                               |   | -                  |   |   | (54,535              | ) |   | (67,035                   | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Net loss for the period                                    | $ | (709,500           | ) | $ | (3,375,390           | ) | $ | (22,320,428               | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Other comprehensive gain (loss)                            |   | -                  |   |   | 13,790               |   |   | (45,740                   | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Comprehensive
      loss for the period                    | $ | (709,500           | ) | $ | (3,361,600           | ) | $ | (22,366,168               | )
|                                                           |   |                    |   |   |                      |   |   |                           |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Loss per share - basic and diluted                         | $ | (0.03              | ) | $ | (0.16                | ) |   |                           |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|                                                           |   |                    |   |   |                      |   |   |                           |  
|Weighted average
      number of common shares outstanding |   | 21,202,375         |   |   | 20,670,083           |   |   |                           |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

ARVANA INC. AND SUBSIDIARIES(A DEVELOPMENT
STAGE COMPANY) CONSOLIDATED STATEMENT OF CASH FLOWS (EXPRESSED IN US
DOLLARS) (UNAUDITED)

|                                                                                                    |   |                    |   |   |                      |   |   | Cumulative amounts        |  
|--------------------------------------------------------------------------------------------------- | - | ------------------ | - | - | -------------------- | - | - | ------------------------- | -
|                                                                                                    |   |                    |   |   |                      |   |   | from the beginning of the |  
|                                                                                                    |   | For the year ended |   |   | development stage on |  
|                                                                                                    |   | December 31,       |   |   | January 1, 2005 to   |  
|                                                                                                    |   | 2008               |   |   | 2007                 |   |   | December 31, 2008         |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Cash flows from operating activities                                                                |   |                    |   |   |                      |   |   |                           |  
|Net loss for the period                                                                             | $ | (709,500           | ) | $ | (3,375,390           | ) | $ | (22,320,428               | )
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Items not involving cash:                                                                           |   |                    |   |   |                      |   |   |                           |  
|Depreciation
      and amortization                                                                 |   | 299                |   |   | 198,405              |   |   | 270,021                   |  
|Stock-based compensation                                                                            |   | 528,800            |   |   | 662,800              |   |   | 9,837,290                 |  
|Loss
      on acquisition of Arvana Networks                                                        |   | -                  |   |   | -                    |   |   | 7,013,310                 |  
|Loss on acquisition
      of Arvana Comunicacoes                                                    |   | -                  |   |   | -                    |   |   | 279,037                   |  
|Loss
      on write-off of equipment                                                                |   | -                  |   |   | 37,196               |   |   | 67,798                    |  
|Loss on bad debt expense                                                                            |   | -                  |   |   | 58,411               |   |   | 58,411                    |  
|Gain
      on debt settlement                                                                       |   | -                  |   |   | (75,000              | ) |   | (75,000                   | )
|Loss on disposal of
      Hallotel                                                                  |   | -                  |   |   | 2,239,014            |   |   | 2,239,014                 |  
|Gain
      on disposal of BCH Beheer                                                                |   | (28,297            | ) |   | -                    |   |   | (28,297                   | )
|Deferred income taxes                                                                               |   | -                  |   |   | (27,714              | ) |   | 31,294                    |  
|Unrealized
      foreign exchange                                                                   |   | (53,895            | ) |   | -                    |   |   | (53,895                   | )
|Changes in non-cash working capital:                                                                |   |                    |   |   |                      |   |   |                           |  
|Receivables                                                                                         |   | -                  |   |   | 63,698               |   |   | (503,998                  | )
|Accounts payable and
      accrued liabilities                                                      |   | 22,464             |   |   | (398,120             | ) |   | 1,472,156                 |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Net cash used in operations                                                                         |   | (240,129           | ) |   | (616,700             | ) |   | (1,713,287                | )
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Cash flows from investing activities                                                                |   |                    |   |   |                      |   |   |                           |  
|Acquisition of equipment                                                                            |   | -                  |   |   | (89,920              | ) |   | (378,751                  | )
|Proceeds of sale of equipment                                                                       |   | -                  |   |   | 3,702                |   |   | 3,702                     |  
|Cash portion of Investment in BCH Beheer
      / Hallotel                                           |   | -                  |   |   | -                    |   |   | (1,445,235                | )
|Cash of Hallotel on disposition
      date                                                          |   | -                  |   |   | (53,136              | ) |   | (53,136                   | )
|Cash of BCH Beheer / Hallotel on acquisition
      date                                             |   | -                  |   |   | -                    |   |   | 105,659                   |  
|Cash of Arvana Networks
      on acquisition date                                                   |   | -                  |   |   | -                    |   |   | 5,800                     |  
|Cash of Arvana Comunicacoes on acquisition
      date                                               |   | -                  |   |   | -                    |   |   | 62,465                    |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Net cash used in investing activities                                                               |   | -                  |   |   | (139,354             | ) |   | (1,699,496                | )
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Cash flows from financing activities                                                                |   |                    |   |   |                      |   |   |                           |  
|Advances from (to) related parties                                                                  |   | 6,979              |   |   | 150,966              |   |   | (232,355                  | )
|Proceeds of loans payable,
      net                                                                |   | 230,975            |   |   | 360,672              |   |   | 591,647                   |  
|Contribution to capital                                                                             |   | -                  |   |   | -                    |   |   | 900                       |  
|Proceeds from issuance
      of common stock, net of finders' fees                                  |   | -                  |   |   | -                    |   |   | 3,097,750                 |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Net cash provided by financing
      activities                                                     |   | 237,954            |   |   | 511,638              |   |   | 3,457,942                 |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Effect of exchange rate changes on cash                                                             |   | -                  |   |   | 13,877               |   |   | (45,653                   | )
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Increase (decrease) in cash                                                                         |   | (2,175             | ) |   | (230,539             | ) |   | (494                      | )
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Cash , beginning of period                                                                          |   | 2,913              |   |   | 233,452              |   |   | 1,232                     |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Cash, end of period                                                                                 | $ | 738                |   | $ | 2,913                |   | $ | 738                       |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Supplementary information                                                                           |   |                    |   |   |                      |   |   |                           |  
|Interest paid                                                                                       | $ | -                  |   | $ | 3,436                |   |   |                           |  
|Taxes paid                                                                                          |   | -                  |   |   | 168                  |   |   |                           |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Transactions not involving cash                                                                     |   |                    |   |   |                      |   |   |                           |  
|Write-off of software associated with the
      disposal of Hallotel                                |   | -                  |   |   | 64,104               |   |   | 64,104                    |  
|Issuance of stock for settlement
      of debt; 500,000 shares of common stock                      |   | -                  |   |   | 75,000               |   |   | 75,000                    |  
|Decrease in accounts payable due to Brulex
      due to disposal of Hallotel                        |   | -                  |   |   | 338,236              |   |   | 338,236                   |  
|Decrease in note payable
      due to Brulex due to disposal of Hallotel                            |   | -                  |   |   | 108,880              |   |   | 108,880                   |  
|Loss of receivables due to Hallotel disposal                                                        |   | -                  |   |   | 1,554,068            |   |   | 1,554,068                 |  
|Loss of property and equipment
      due to Hallotel disposal                                       |   | -                  |   |   | 516,497              |   |   | 516,497                   |  
|Loss of accounts payable and accrued liabilities
      due to Hallotel disposal                     |   | -                  |   |   | 1,867,306            |   |   | 1,867,306                 |  
|Loss of deferred income
      tax liability due to Hallotel disposal                                |   | -                  |   |   | 31,445               |   |   | 31,445                    |  
|Decrease in accounts payable due to disposal
      of BCH Beheer                                    |   | 28,305             |   |   | -                    |   |   | 28,305                    |  
|                                                                                                    |   |                    |   |   |                      |   |   |                           |  
|Common shares cancelled due to disposal
      of Hallotel (3,541,700 @ $0.08)                       |   | -                  |   |   | 283,336              |   |   | 283,336                   |  
|Common shares issued for
      services (451,875 @ $0.40)                                           |   | -                  |   |   | -                    |   |   | 180,750                   |  
|Common shares issued for acquisition of
      BCH Beheer / Hallotel (3,541,700 @ $0.40)             |   | -                  |   |   | -                    |   |   | 1,416,680                 |  
|Common shares issued for
      finders fees for BCH Beheer / Hallotel Acquisition (208,300 @ $0.40) |   | -                  |   |   | -                    |   |   | 83,320                    |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

ARVANAINC. ANDSUBSIDIARIES(A
DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIENCY) (EXPRESSED IN US DOLLARS)

Common
        Stock
      
      
      Treasury
        Stock
      
      
      
      
      
      
      
      
      DeficitAccumulated
      
      
      Accumlated
      
      
      TotalAdditional
      
      
      
      
      
      during the
      
      
      other
      
      
      Stockholders'Paid-in
      
      
      
      
      
      development
      
      
      comprehensive
      
      
      EquityShares
      
      
      Amount
      
      
      Shares
      
      
      Amount
      
      
      Capital
      
      
      Deficit
      
      
      stage
      
      
      loss
      
      
      (Deficiency)From inception to December 31, 2004
      
      8,253,000
      
      $
      8,253
      
      
      -
      
      $
      -
      
      $
      88,310
      
      $
      (95,331
      )
      $
      -
      
      $
      -
      
      $
      1,232Contribution to capital
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      900
      
      
      -
      
      
      -
      
      
      -
      
      
      900Return and cancellation of common stock
        - March 2005
      
      (1,350,000
      )
      
      (1,350
      )
      
      -
      
      
      -
      
      
      1,350
      
      
      -
      
      
      -
      
      
      -
      
      
      -Issuance of common stock
        for cash at $0.10 - May 2005
      
      3,000,000
      
      
      3,000
      
      
      -
      
      
      -
      
      
      5,997,000
      
      
      -
      
      
      -
      
      
      -
      
      
      6,000,000Issuance of common stock for cash at
        $1.25 - July 2005
      
      400,000
      
      
      400
      
      
      -
      
      
      -
      
      
      911,600
      
      
      -
      
      
      -
      
      
      -
      
      
      912,000Return and cancellation
        of common stock - August 2005
      
      (1,017,000
      )
      
      (1,017
      )
      
      -
      
      
      -
      
      
      1,017
      
      
      -
      
      
      -
      
      
      -
      
      
      -Issuance of common stock for cash at
        $1.25 - August 2005
      
      792,000
      
      
      792
      
      
      -
      
      
      -
      
      
      1,804,968
      
      
      -
      
      
      -
      
      
      -
      
      
      1,805,760Issuance of common stock
        for finders fee at $2.28 - August 2005
      
      330,000
      
      
      330
      
      
      -
      
      
      -
      
      
      752,070
      
      
      -
      
      
      -
      
      
      -
      
      
      752,400Issuance of common stock in transaction
        with Arvana Networks at $2.28 - August 2005
      
      3,000,000
      
      
      3,000
      
      
      -
      
      
      -
      
      
      6,837,000
      
      
      -
      
      
      -
      
      
      -
      
      
      6,840,000Finders fees paid in
        cash - July, August, September 2005
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (164,000
      )
      
      -
      
      
      -
      
      
      -
      
      
      (164,000
      )Issuance of common stock for cash at
        $1.25 - October 2005
      
      440,000
      
      
      440
      
      
      -
      
      
      -
      
      
      1,002,760
      
      
      -
      
      
      -
      
      
      -
      
      
      1,003,200Issuance of common stock
        for finders fee at $2.28 - October 2005
      
      43,500
      
      
      44
      
      
      -
      
      
      -
      
      
      99,137
      
      
      -
      
      
      -
      
      
      -
      
      
      99,181Finders fees paid in cash - October
        2005
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (54,750
      )
      
      -
      
      
      -
      
      
      -
      
      
      (54,750
      )Net operating loss for
        the year ended December 31, 2005
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      
      
      
      (16,492,608
      )
      
      -
      
      
      (16,492,608
      )Balance December 31, 2005
      
      13,891,500
      
      $
      13,892
      
      
      -
      
      $
      -
      
      $
      17,277,362
      
      $
      (95,331
      )
      $
      (16,492,608
      )
      $
      -
      
      $
      703,315Stock-based compensation
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      232,400
      
      
      -
      
      
      -
      
      
      -
      
      
      232,400Issuance of common stock for acquisition
        of BCH Beheer / Hallotel, including transaction fee
      
      3,750,000
      
      
      3,750
      
      
      -
      
      
      -
      
      
      1,496,250
      
      
      -
      
      
      -
      
      
      -
      
      
      1,500,000Issuance of common stock
        for cash at $0.40
      
      2,625,000
      
      
      2,625
      
      
      -
      
      
      -
      
      
      1,047,375
      
      
      -
      
      
      -
      
      
      -
      
      
      1,050,000Issuance of common stock for services
        at $0.40
      
      451,875
      
      
      452
      
      
      -
      
      
      -
      
      
      180,298
      
      
      -
      
      
      -
      
      
      -
      
      
      180,750Finders fees paid in
        cash
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (73,500
      )
      
      -
      
      
      -
      
      
      -
      
      
      (73,500
      )Net operating loss for the year ended
        December 31, 2006
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,742,930
      )
      
      -
      
      
      (1,742,930
      )Foreign currency translation
        adjustment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (59,530
      )
      
      (59,530
      )Balance December 31, 2006
      
      20,718,375
      
      $
      20,719
      
      
      -
      
      $
      -
      
      $
      20,160,185
      
      $
      (95,331
      )
      $
      (18,235,538
      )
      $
      (59,530
      )
      $
      1,790,505Stock-based compensation
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      662,800
      
      
      -
      
      
      -
      
      
      -
      
      
      662,800Return and cancellation of common stock
      
      (16,000
      )
      
      (16
      )
      
      -
      
      
      -
      
      
      16
      
      
      -
      
      
      -
      
      
      -
      
      
      -Issuance of common stock
        for debt settlement
      
      500,000
      
      
      500
      
      
      -
      
      
      -
      
      
      74,500
      
      
      -
      
      
      -
      
      
      -
      
      
      75,000Treasury stock acquired on disposal
        of subsidiary
      
      -
      
      
      -
      
      
      (3,541,700
      )
      
      (283,336
      )
      
      
      
      
      -
      
      
      (45,740
      )
      
      45,740
      
      
      (283,336
      )Net operating loss for
        the year ended December 31, 2007
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (3,375,390
      )
      
      -
      
      
      (3,375,390
      )Foreign currency translation adjustment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      13,790
      
      
      13,790Balance December 31, 2007
      
      21,202,375
      
      $
      21,203
      
      
      (3,541,700
      )
      $
      (283,336
      )
      $
      20,897,501
      
      $
      (95,331
      )
      $
      (21,656,668
      )
      $
      -
      
      $
      (1,116,631
      )Stock-based compensation
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      528,800
      
      
      -
      
      
      -
      
      
      -
      
      
      528,800Net operating loss for
        the year ended December 31, 2008
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (709,500
      )
      
      -
      
      
      (709,500
      )Balance December 31, 2008
      
      21,202,375
      
      $
      21,203
      
      
      (3,541,700
      )
      $
      (283,336
      )
      $
      21,426,301
      
      $
      (95,331
      )
      $
      (22,366,168
      )
      $
      -
      
      $
      (1,297,331
      )


The accompanying notes are an integral part of these
consolidated financial statements.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

1. Nature of Business and Ability to Continue as a Going
Concern

Arvana Inc., (the Company) was incorporated under the laws of
the State of Nevada as Turinco, Inc. on September 16, 1977, with authorized
common stock of 2,500 shares with a par value of $0.25. On October 16, 1998, the
authorized capital stock was increased to 100,000,000 shares with a par value of
$0.001. On July 24, 2006, the shareholders approved a change of the Companys
name from Turinco, Inc. to Arvana Inc.

In 1998, the Company completed a common stock split of eight
shares for each outstanding share. In 2005, the Company completed another common
stock split of nine shares for each outstanding share. These consolidated
financial statements have been prepared showing after stock split shares with a
par value of $0.001.

These consolidated financial statements for the year ended
December 31, 2008 include the accounts of the Company, its subsidiary Arvana
Networks (including its wholly-owned subsidiaries Arvana Par and Arvana
Comunicações do Brasil S. A. (Arvana Com) and its formerly-owned subsidiary
BCH Beheer B.V. up to its date of disposal on December 30, 2008 (and its
formerly wholly-owned subsidiary Hallotel Deutschland GmbH up to its date of
disposal on December 7, 2007). The Company has ceased all operations in its
subsidiary companies, and has written-off or disposed of all assets in the
subsidiary companies, consequently they are now all considered to be inactive
subsidiaries.

These consolidated financial statements have been prepared on a
going concern basis, which assumes the realization of assets and settlement of
liabilities in the normal course of business. For the year ended December 31,
2008, the Company incurred a loss from operations of $709,500. At December 31,
2008, the Company had a working capital deficiency of $1,297,734. These
conditions raise substantial doubt about the Companys ability to continue as a
going concern.

Accordingly, the Company will require continued financial
support from its shareholders and creditors until it is able to generate
sufficient cash flow from operations on a sustained basis. There is substantial
doubt that the Company will be successful at achieving these results. Failure to
obtain the ongoing support of its shareholders and creditors may make the going
concern basis of accounting inappropriate, in which case the Companys assets
and liabilities would need to be recognized at their liquidation values. These
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might arise from this uncertainty.

2. Summary of Significant Accounting Policies

a) Basis of presentationThe Company began to
generate revenues as a result of the acquisition of Hallotel during the final
four months of 2006. In 2007 the Company commenced its planned principal
operations and determined its target market segments and market strategies.
Consequently, the Company exited the development stage during early 2007. The
Company then disposed of Hallotel in December 2007 and ceased all operations in
its subsidiary companies. The Company is again in the process of evaluating
business opportunities and has returned to the development stage and presents
its financial statements in accordance with Statement of Financial Accounting
Standard (SFAS) No. 7, Accounting and Reporting by Development Stage
Enterprises. The Companys fiscal year end is December 31. The accompanying
consolidated financial statements of Arvana Inc. for the years ended December
31, 2008 and 2007, and for the cumulative amounts from the beginning of the
development stage on January 1, 2005, through December 31, 2008, have been
prepared in accordance with accounting principles generally accepted in the
United States (US GAAP) for financial information with the instructions to
Form 10-K and Regulation S-K. In the opinion of management, they include all
adjustments, consisting only of normal recurring items, necessary for a fair
presentation. Results are not necessarily indicative of results which may be
achieved in the future.

b) Basis of consolidationIncluded in the financial
statements are the accounts of the Company, its wholly-owned subsidiaries Arvana
Networks, Arvana Par, and Arvana Com. The accounts of the Companys formerly
wholly-owned subsidiary, BCH Beheer, are included up to the date of its disposal
on December 30, 2008. The accounts of the Companys formerly wholly-owned
subsidiary, Hallotel, are included up to the date of its disposal on December 7,
2007. All significant inter-company transactions and balances have been
eliminated.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

c) EstimatesThe preparation of consolidated
financial statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

d) Foreign currency translation and transactionsThe
Company uses the temporal method when translating the Brazilian subsidiary
operations. Long-term assets and liabilities denominated in a foreign currency
are translated into US dollars at the exchange rate in effect on the transaction
date. Revenue and expenses are translated at the average rates of exchange
prevailing during the periods.

The Company used the current rate method when translating its
former Dutch subsidiary BCH Beheer and its former German subsidiary Hallotel.
All assets and liabilities denominated in a foreign currency are translated into
US dollars at the exchange rate in effect on the balance sheet date. Revenue and
expenses are translated at the average rates of exchange prevailing during the
periods.

Transactions conducted in foreign currencies are recorded using
the exchange rate in effect on the transaction date. At the period end, monetary
assets and liabilities are translated to the functional currency of each entity
using the exchange rate in effect at the period end date. Transaction gains and
losses are recorded in foreign exchange gain or loss.

The exchange rate prevailing at December 31, 2008, was 2.3145,
stated in the Brazilian Real per one US dollar. The average exchange rate during
the twelve-month period ended December 31, 2008, was 1.8402 stated in the
Brazilian Real per one US dollar. For the Euro, the exchange rate prevailing at
December 31, 2008, was 1.3920 US dollars per Euro and the average exchange rate
during the twelvemonth period ended December 31, 2008, was 1.4713 US dollars per
Euro.

e) Revenue recognitionThe Company records revenues
upon the completion of the services and where the ability to collect is
reasonably assured.

f) Comprehensive incomeThe Company has adopted SFAS
No. 130, Reporting Comprehensive Income, which establishes standards for
reporting and presentation of comprehensive income, its components and
accumulated balances.

g) Cash equivalentsThe Company considers all highly
liquid investments, with terms to maturity of three months or less when
acquired, to be cash equivalents.

h) Accounts receivableTrade and other accounts
receivable are reported at face value less any provisions for uncollectible
accounts considered necessary. Accounts receivable primarily includes trade
receivables from customers. The Company estimates doubtful accounts on an
item-by-item basis and includes over-aged accounts as part of the allowance for
doubtful accounts, which are generally ones that are ninety days or greater
overdue.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

i) Property and equipment:Property and equipment is
stated at cost less accumulated depreciation and is depreciated on a straight
line basis, commencing when the assets are put into use over the estimated
useful lives of the assets as follows:

Machinery & equipment
    10 yearsOffice equipment
    3  5 yearsComputer hardware
    5 yearsSoftware
    1  4 years


In accordance with SFAS 144, Accounting for Impairment or
Disposal of Long-Lived Assets, the Company reviews the carrying value of
long-lived assets for impairment whenever events and circumstances indicate that
the carrying value of the assets might be impaired and the carrying value may
not be recoverable. Recoverability of these assets is measured by comparison of
the carrying value of the assets to the undiscounted cash flows estimated to be
generated by those assets over the remaining economic life. If the undiscounted
cash flows are not sufficient to recover the carrying value of such assets, the
assets are considered impaired. The impairment loss is measured by comparing the
fair value of the assets to their carrying values. Fair value is determined by
either a quoted market price or a value determined by a discounted cash flow
technique, whichever is more appropriate under the circumstances involved. No
impairment was required to be recorded during the periods presented in these
consolidated financial statements.

j) Impairment of long-lived assets and long-lived assets to
be disposed of:Long-lived assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

k) Financial instrumentsFinancial instruments of
the Company are comprised of cash, accounts payable and accrued liabilities,
note payable, amounts due to and from related parties, and loans payable. The
estimated fair values of financial instruments were considered by management to
be not materially different from their carrying values due to their short term
to maturity or capacity for prompt liquidation.

l) Concentration of credit riskFinancial
instruments that potentially subject the company to concentrations of credit
risk consists of cash. The Company maintains cash in bank accounts that, at
times, may exceed federally insured limits. The Company has not experienced any
losses in such accounts and believes it is not exposed to any significant risks
on its cash in bank accounts.

m) Asset retirement obligationsThe Company records
the fair value of an asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the retirement of tangible
long-lived assets that result from the acquisition, construction, development,
and/or normal use of the long-lived assets. The Company also records a
corresponding asset which is amortized over the life of the asset. Subsequent to
the initial measurement of the asset retirement obligation, the obligation is
adjusted at the end of each period to reflect the passage of time (accretion
expense) and changes in the estimated future cash flows underlying the
obligation (asset retirement cost). The Company does not have any asset
retirement obligations for the periods presented.

n) Income taxesIncome taxes are provided in
accordance with Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes". A deferred tax asset or liability is
recorded for all temporary differences between financial and tax reporting and
net operating loss carry-forwards. Deferred tax expense (benefit) results from
the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

o) Stock-based compensationThe Company accounts for
all stock-based payments to employees and non-employees under SFAS No. 123R,
Accounting for Stock-Based Compensation, using the fair value based method.
Under the fair value method, stock-based payments are measured at the fair value
of the consideration received, or the fair value of the equity instruments
issued, or liabilities incurred, whichever is more reliably measurable. The cost
of stock-based payments to non-employees that are fully vested and
non-forfeitable at the grant date is measured and recognized at that date.

p) Net loss per shareBasic loss per share is
computed using the weighted average number of common shares outstanding during
the year. Diluted loss per share is computed using the weighted average number
of common shares and potentially dilutive common stock equivalents, including
stock options and warrants. As at December 31, 2008, the Company had 1,600,000
of potentially dilutive instruments that were excluded from the determination of
diluted loss per share as they would be anti-dilutive.

q) ReclassificationsCertain of the comparative
figures for the prior year have been reclassified to conform with the
presentation adopted in the current year.

r) Recent accounting pronouncementsIn September
2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157
establishes a framework for measuring the fair value of assets and liabilities.
This framework is intended to provide increased consistency in how fair value
determinations are made under various existing accounting standards which
permit, or in some cases require, estimates of fair market value. SFAS No. 157
is effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years.

FASB Staff Position 157-2 (FSP FAS 157-2) delayed the
effective date of FAS 157 until fiscal years beginning after November 15, 2008,
and interim periods within those fiscal years, for all non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually).
The Company adopted FAS 157 on January 1, 2008, and utilized the one year
deferral for non-financial assets and non-financial liabilities that was granted
by FSP FAS 157-2. The adoption of FAS 157 did not have a material impact on the
Companys consolidated financial statements.

In February, 2007, the FASB issued SFAS No. 159 The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. The adoption of FAS 159 did not have a
material impact on the Companys consolidated financial statements.

In March 2008, the FASB issued FAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities (FAS 161). FAS 161 changes the
disclosure requirements for derivative instruments and hedging activities by
requiring enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are accounted
for under FAS 133, and how derivative instruments and related hedged items
affect an entitys operating results, financial position, and cash flows. FAS
161 is effective for fiscal years beginning after November 15, 2008. Early
adoption is permitted. The Company is currently reviewing the provisions of FAS
161 and has not yet adopted the statement. However, as the provisions of FAS 161
are only related to disclosure of derivative and hedging activities, the Company
does not believe the adoption of FAS 161 will have a material impact on its
consolidated operating results, financial position, or cash flows.

In April 2008, the FASB issued FSP FAS 142-3, Determination of
the Useful Life of Intangible Assets or FSP FAS 142-3. FSP FAS 142-3 amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS
No. 142, Goodwill and Other Intangible Assets. The intent of the position is to
improve the consistency between the useful life of a recognized intangible asset
under SFAS No. 142 and the period of expected cash flows used to measure the
fair value of the intangible asset. FSP FAS 142-3 is effective for fiscal years
beginning after December 15, 2008. We are assessing the potential impact that
the adoption of FSP FAS 142-3 may have on our consolidated financial position,
results of operations or cash flows.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles or SFAS No. 162. SFAS No. 162
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with GAAP. This
statement shall be effective 60 days following the Securities and Exchange
Commissions approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. We do not believe that implementation
of this standard will have a material impact on our consolidated financial
position, results of operations or cash flows.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, (FSP EITF 03-6-1). FSP EITF 03-6-1 states that
unvested share-based payment awards that contain nonforfeitable rights to
dividends or dividend equivalents (whether paid or unpaid) are participating
securities and shall be included in the computation of earnings per share
pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years
beginning after December 15, 2008. Management has determined that the adoption
of FSP EITF 03-6-1 will not have an impact on the Financial Statements.

3. Arvana Networks Transaction

On August 18, 2005, Arvana Inc. (Arvana) completed a
transaction with Arvana Networks whereby 100% of the 4,500,000 shares (1,500,000
shares of which are described below) of Arvana Networks were exchanged for an
equal number of shares in Arvana Inc.

Arvana Networks had an agreement with IP Horizon LLC (IPH),
whereby IPH was issued 1,500,000 shares in exchange for a commitment to deliver
equipment, software and network hardware for the initial launching of VoIP
service in Brazil.

As at December 31, 2006, the Company had not received the full
complement of assets to be acquired in connection with this transaction or other
consideration. Accordingly, the 1,500,000 shares were not reflected on our
financial statements as having been issued. In 2007 the following agreement was
reached with IPH with respect to this transaction:

| | i.   | IPH returned to the Company for cancellation the
      1,500,000 common shares of Arvana issued to IPH in August 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii.  | IPH had contributed certain equipment to, and had
      developed certain software for, the Company, with an agreed upon value of
      $150,000. In settlement of the debt due from the contribution of the
      aforementioned equipment and software architecture services from IPH to
      Arvana and Arvana Networks, during 2007 the Company issued 500,000 common
      shares at an agreed price of $0.30 per share. The shares were recorded as
      being issued at a price of $0.15 per share, the price of the Companys
      shares at the date of entering into the debt settlement agreement, giving
      rise to a gain on settlement of debt of $75,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | iii. | As both Arvana and Arvana Networks are development stage
      companies, the share exchange transaction was outside the scope of
      Statement of Financial Accounting Standard No. 141, Business
      Combination. Consequently, the transaction was recorded at the fair value
      of the 3.0 million Arvanas common shares issued for the transaction based
      on the quoted market price of the Companys common stock on the date of
      the agreement of $2.28 per share. This agreed upon consideration paid for
      the transaction was calculated based on the fair value of the assets
      recorded on Arvana Networks financial statements at the time of the
      transaction and on the compensation expenses given to management of Arvana
      Networks for pre-operating services provided to Arvana Networks and to
      retain their services. As such, the purchase price of the transaction was
      allocated among the $5,800 in cash and $131,747 in other assets acquired
      and $310,857 in liabilities assumed based on the fair value and the excess
      of purchase price over fair value of assets acquired and liabilities
      assumed was recorded in 2005 as compensation expense paid of $7,013,310 to
      the management of Arvana Networks at the time of the
  transaction.

4. Arvana Comunicações Transaction

On October 6, 2005, the Company, through its wholly-owned
subsidiaries, completed the first closing of an investment agreement with
Gloinfo 500 Soluções EM Telemática Ltda. (Gloinfo) and Paulo Messina
(described below) for the acquisition of Arvana Comunicações.

In early 2006, management entered into negotiations with the
principals of Gloinfo with the intention of terminating the Investment Agreement
by mutual agreement. On October 31, 2006 the Company signed a definitive
agreement with Gloinfo pursuant to which the Investment Agreement was
terminated. The main terms of the termination of the Investment Agreement that
have been agreed to by Gloinfo were as follows:

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

| | i.   | The terms of the Investment Agreement have been cancelled
      and Gloinfo transferred its 25% ownership to Arvana Par.                                                                                                                                  
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii.  | The customers that were to be transferred to Arvana Com
      under the terms of the agreement remained with Gloinfo.                                                                                                                                     
| | iii. | The employees that were to be transferred under the terms
      of the agreement remained with Gloinfo.                                                                                                                                                   
| | iv.  | Employees that were hired into the project were
      terminated and the termination costs were shared 75% by Arvana Com and 25%
      by Gloinfo.                                                                                                        
| | v.   | Arvana Com obtained the Televoz branding and the
      website associated with this product from Gloinfo.                                                                                                                                               
| | vi.  | Arvana Com retained ownership and operating control of
      the technology platform used by Gloinfo to service their customers.
      Gloinfo purchased and installed a new technology platform and was to
      return the original equipment to Arvana.

During 2007 the Company determined that an advance of $58,411
that it had made to Gloinfo was uncollectible and wrote it off as bad debt
expense. During 2007 the Company also wrote-off $37,196 in property and
equipment held by Gloinfo that the Company determined was unrecoverable.

5. BCH Beheer and Hallotel Deutschland GmbH Transactions

On August 9, 2006 the Company, Brulex  Consultadoria Economica
E Marketing Ltda. (Brulex) and Hallotel Deutschland GmbH (Hallotel) entered
into a share purchase agreement (the Share Purchase Agreement) pursuant to
which the Company acquired control over Hallotel through the acquisition (the
Acquisition) of all of the outstanding shares of BCH Beheer B.V., a
wholly-owned subsidiary of the Vendor that owned all of the outstanding shares
of Hallotel. The purchase price for the Acquisition was paid by way of:

| | i.   | the issue of 3,541,700 shares of common stock of the
      Company, valued at $0.40 per share;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii.  | the payment of €500,000 in cash; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | iii. | the issuance of a promissory note in the principal amount
      of €250,000 provided that the promissory note will not be payable and will
      be deemed cancelled if certain information as set out in the Share
      Purchase Agreement to be delivered by Brulex to the Purchaser within 30
      days of the closing of the Acquisition relating to certain assets was not
      delivered or, if delivered, did not materially conform with information
      provided to the Company as at the date of the Share Purchase
    Agreement.

Pursuant to the Share Purchase Agreement, the purchase price
was increased by:

| | i.  | a payable to Brulex in the amount of €80,932 for the
      price actually paid by Hallotel for any telephone technology hardware or
      software assets acquired after October 19, 2005 and before the closing
      date of the Acquisition that are required for the provision of established
      Hallotel services to its customers; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii. | a payable to Brulex in the amount of €277,630 for
      commissions paid by Hallotel to its salespersons in respect of carrier
      pre- select sign-ups on net new customers after October 19, 2005 and
      before the closing date of the Acquisition, as provided in the Share
      Purchase Agreement.                                 

Prior to the acquisition date, Arvana had paid $26,941 for
acquisition related expenses and this amount was included in the purchase price.
A transaction fee was paid by issuing 208,300 additional shares of common stock
of the Company, valued at $0.40 per share.

The purchase price of the transaction, with a value of
$2,948,003 was allocated as to $105,659 in cash, $1,080,529 in accounts
receivables, $15,371 in other current assets, $1,368,845 in accounts payable and
accrued liabilities and, $2,605,499 to the value of monthly subscribers held by
Hallotel at the time of the acquisition. Equipment valued at $500,915 and
software valued at $8,875 was held by Hallotel on the acquisition date.

On December 7, 2007, the Company entered into a settlement and
share purchase agreement with Brulex to dispose of the Companys subsidiary,
Hallotel. Under the terms of the agreement Brulex returned to the Company for
cancellation the 3,541,700 of its common shares issued for the acquisition of
BCH Beheer and Hallotel. The shares were valued at $283,336 based on the
Companys common share price of $0.08 on December 7, 2007. The amounts due to
Brulex under the terms of the original Acquisition were reduced by $447,116,
which consisted of accounts payable of $338,236 and note payable of $108,880, to
€225,000. The Company wrote off a receivable due from Hallotel in the amount of
$74,913 as well as software retained by Hallotel in the amount of $64,104. The
original investment in Hallotel by the Company of $2,948,003 was adjusted by the
effect of Hallotels operations from acquisition to disposal resulting in a net
decrease in the Companys retained earnings of $74,455 and an accumulated other
comprehensive loss of $43,099. The net effect of the above transactions resulted
in a loss of $2,239,014 upon disposal of Hallotel.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

On December 30, 2008, the Company entered into a sale and
purchase agreement with Nazleal S.A. to dispose of the Companys subsidiary, BCH
Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts,
obligations, and guarantees of BCH Beheer as of December 30, 2008, totaling
€40,334 ($56,145) and the Company will reimburse Nazleal S.A. €20,000 ($27,840)
for assuming all of BCH Beheers liabilities. The Company also wrote off $8 in
cash. The net effect of the above transactions resulted in a gain of $28,297
upon disposal of BCH Beheer.

6. Property and Equipment

|At December 31,
      2008: |   |       |  |   |              |  |   |                  | 
|--------------------------- | - | ----- |  | - | ------------ |  | - | ---------------- | 
|                            |   |       |  |   | Accumulated  |  |   | Net              | 
|                            |   | Cost  |  |   | Amortization |  |   | Book
      Value | 
|Equipment                   | $ | 1,502 |  | $ | 1,099        |  | $ | 403              | 

|At December 31,
      2007 |   |       |  |   |              |  |   |                  | 
|-------------------------- | - | ----- |  | - | ------------ |  | - | ---------------- | 
|                           |   |       |  |   | Accumulated  |  |   | Net              | 
|                           |   | Cost  |  |   | Amortization |  |   | Book
      Value | 
|Equipment                  | $ | 1,502 |  | $ | 800          |  | $ | 702              | 

7. Related Parties and Loans Payable

On February 20, 2007, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
150,000 Euros ($208,800 USD). Repayment of the loan is due on closing of any
future financing arrangement by the Company. Accrued interest of $23,776 has
been recorded in accounts payable and accrued liabilities for the year ended
December 31, 2008.

On June 1, 2007, the Company received an unsecured, 6% interest
per annum loan from a shareholder of the Company in the amount of $35,000 CAD
($28,735 USD). Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $2,807 has been recorded in
accounts payable and accrued liabilities for the year ended December 31,
2008.

On November 6, 2007, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
75,000 Euros ($104,400 USD). Repayment of the loan is due on closing of any
future financing arrangement by the Company. Accrued interest of $7,616 has been
recorded in accounts payable and accrued liabilities for the year ended December
31, 2008.

On March 26, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$50,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $2,298 has been recorded in
accounts payable and accrued liabilities for the year ended December 31,
2008.

On March 26, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$5,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $230 has been recorded in
accounts payable and accrued liabilities for the year ended December 31,
2008.

On March 31, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$50,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $2,258 has been recorded in
accounts payable and accrued liabilities for the year ended December 31,
2008.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

On April 7, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $50,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued
interest of $2,200 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On April 9, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $45,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued
interest of $1,965 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On June 26, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $3,000 CAD ($2,463 USD). Repayment of the loan is due on closing of any future financing arrangement by the
Company. Accrued interest of $75 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On July 4, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $10,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued
interest of $294 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On July 10, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $2,500 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued
interest of $71 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On August 12, 2008, the Company received an unsecured, non-interest bearing loan from an unrelated party in the amount of $6,300 CAD. The Company repaid $2,000 CAD of this loan on October 16, 2008, leaving a loan balance of $4,300 CAD
($3,530 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company.

On September 12, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $5,000 CAD ($4,105 USD). Repayment of the loan is due on closing of any future financing arrangement by
the Company. Accrued interest of $74 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On October 16, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $2,000 CAD ($1,642 USD). Repayment of the loan is due on closing of any future financing arrangement by the
Company. Accrued interest of $21 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On October 21, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $5,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued
interest of $59 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On November 13, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $3,500 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company.
Accrued interest of $28 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

At December 31, 2008, the Company had amounts due to related parties in the amount of $196,482 (December 31, 2007 - $198,517). This amount includes $136,100 (December 31, 2007 - $136,100) payable to three directors for services
rendered during 2007. This amount is to be paid part in cash and part in stock at a future date with the number of common shares determined by the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured,
and have no fixed terms of repayment.

For the year ended December 31, 2008, $83,671 (December 31, 2007 $26,707) was incurred in general and administrative expenses by the Company for services rendered by the current Chief Executive Officer, Chief Financial Officer and Corporate
Secretary of the Company. At December 31, 2008, $6,979 (December 31, 2007 $Nil) was owed to the current Chief Executive Officer, Chief Financial Officer and Corporate Secretary of the Company. At December 31, 2008, $16,420 (December 31,
2007 $20,176) was owed to the former Chief Financial Officer and Corporate Secretary and $22,988 (December 31, 2007 $28,246) was owed to the former President / Chief Executive Officer. The Corporate Secretary of Arvana Networks Inc. was
owed $13,995 at December 31, 2008 (December 31, 2007 $13,995). The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

For the year ended December 31, 2007, $26,707 (December 31,
2006 $NIL) was incurred in general and administrative expenses by the Company
for services rendered by the current Chief Financial Officer and Corporate
Secretary of the Company. At December 31, 2007, $20,176 (December 31, 2006
$17,200) was owed to the former Chief Financial Officer and Corporate Secretary
and $28,246 (December 31, 2006 $24,080) was owed to the former President / Chief
Executive Officer. The Corporate Secretary of Arvana Networks Inc. was owed
$13,995 at December 31, 2007 (December 31, 2006 $6,364). The amounts owing bear
no interest, are unsecured, and have no fixed terms of repayment.

8. Share Capital

(a) During the year ended December 31, 2007, 3,541,700 shares
were to be returned to the Company and cancelled as part of the Brulex
Settlement Agreement entered into on December 7, 2007, see Note 5. These shares
had not yet been cancelled at December 31, 2008 and have been recorded as
treasury stock at a value of $283,336 until they are cancelled.

During the year ended December 31, 2007, the Company cancelled
and returned to treasury 16,000 common shares at a par value of $0.001 per
share. These shares had been held as unissued by the Companys legal counsel.

During the year ended December 31, 2007, the Company issued
500,000 common shares at a price of $0.15 per share in settlement of debt, see
Note 3.

(b) The Company accounts for all stock-based payments to
employees and non-employees under SFAS No.123R, Accounting for Stock-Based
Compensation, using the fair value based method. Under the fair value method,
stock-based payments are measured at the fair value of the consideration
received, or the fair value of the equity instruments issued, or liabilities
incurred, whichever is more reliably measurable. The cost of stock-based
payments to non-employees that are fully vested and non-forfeitable at the grant
date is measured and recognized at that date.

(c) The Company has a stock option plan in place under which it
is authorized to grant options to executive officers and directors, employees
and consultants enabling them to acquire up to 10% of the issued and outstanding
common stock of the Company. Under the plan, the exercise price of each option
equals the market price of the Company's stock as calculated on the date of
grant. The options can be granted for a maximum term of 10 years. On June 5,
2006, the Company granted 1,600,000 stock options to its directors and
employees. Each option is exercisable into one common share until December 31,
2009 at an exercise price of $1.25. The options were valued at $1,424,000 using
the Black-Scholes model, and have been expensed over the vesting period of the
options. The Company recorded an expense of $528,800 in 2008 ($662,800 - 2007)
for the balance of the full charge. The weighted average fair value of options
granted during 2006 was $0.89.

As at December 31, 2008, the following incentive stock options
are outstanding:

|Number     | Exercise |                  
|---------- | -------- | -----------------
|of options | Price    | Expiry Date      
|           |          |                  
|1,600,000  | $ 1.25   | December 31, 2009

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

Stock option transactions and the number of share options
outstanding are summarized as follows:

|                                        |  |                  |  |   | Weighted | 
|--------------------------------------- |  | ---------------- |  | - | -------- | 
|                                        |  |                  |  |   | Average  | 
|                                        |  | Number           |  |   | Exercise | 
|                                        |  | of
      Options |  |   | Price    | 
|                                        |  |                  |  |   |          | 
|Balance, December 31, 2005              |  | -                |  | $ | -        | 
|Options granted                         |  | 1,600,000        |  |   | 1.25     | 
|Options
      expired                   |  | -                |  |   | -        | 
|Options exercised                       |  | -                |  |   | -        | 
|Balance, December 31, 2006              |  | 1,600,000        |  |   | 1.25     | 
|Options granted                         |  | -                |  |   | -        | 
|Options
      expired                   |  | -                |  |   | -        | 
|Options exercised                       |  | -                |  |   | -        | 
|Balance, December 31, 2007              |  | 1,600,000        |  | $ | 1.25     | 
|Options granted                         |  | -                |  |   | -        | 
|Options
      expired                   |  | -                |  |   | -        | 
|Options exercised                       |  | -                |  |   | -        | 
|Balance, December 31, 2008              |  | 1,600,000        |  | $ | 1.25     | 
|                                        |  |                  |  |   |          | 
|Number of options currently exercisable |  | 1,066,667        |  | $ | 1.25     | 

9. Segmented Information

The Company has no reportable segments. All of the Companys
equipment at December 31, 2008, and December 31, 2007, was located in North
America.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A development stage company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2008 and 2007
|(expressed in US dollars)                     
|                                              

10. Deferred Income Taxes

Income tax benefits attributable to losses from United States
of America operations was $Nil for the years ended December 31, 2008 and 2007,
and differed from the amounts computed by applying the United States of America
federal income tax rate of 34 percent to pretax losses from operations as a
result of the following:

|                                                       |   | 2008     |   |   | 2007       |  
|------------------------------------------------------ | - | -------- | - | - | ---------- | -
|                                                       |   |          |   |   |            |  
|Loss for the year before income taxes                  | $ | (709,500 | ) | $ | (3,320,855 | )
|                                                       |   |          |   |   |            |  
|Computed "expected" tax benefit                        | $ | (241,230 | ) | $ | (1,129,091 | )
|Non deductible expenses                                |   | 148,838  |   |   | 1,112,081  |  
|Lower effective income tax rate on (income)
      loss |   | -        |   |   | (14,354    | )
|of foreign subsidiaries                                |   |          |   |   |            |  
|Change in valuation allowance                          |   | 92,392   |   |   | 85,899     |  
|                                                       |   |          |   |   |            |  
|Income tax expense                                     | $ | -        |   | $ | 54,535     |  

The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities at
December 31, 2008 and 2007 are presented below:

|                                             |   | 2008     |   |   | 2007     |  
|-------------------------------------------- | - | -------- | - | - | -------- | -
|Deferred tax assets:                         |   |          |   |   |          |  
|Net
      operating loss carry forwards - US | $ | 387,492  |   | $ | 295,099  |  
|Valuation allowance                          |   | (387,492 | ) |   | (295,099 | )
|Net deferred tax asset                       | $ | -        |   | $ | -        |  

The valuation allowance for deferred tax assets as of December
31, 2008 and 2007 was $387,492 and $295,099, respectively. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible.

Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies in
assessing the realizability of deferred tax assets. In order to fully realize
the deferred tax asset attributable to net operating loss carryforwards, the
Company will need to generate future taxable income of approximately $1,140,000
prior to the expiration of the net operating loss carryforwards.

11. Subsequent Events

Subsequent to December 31, 2008, the Company has received a
loan from a shareholder of the Company totaling $25,000. The loan is unsecured,
payable on demand and bears interest at the rate of 6% per annum.

---

ITEM 9.        CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Engagement of Davidson and Company

We engaged Davidson and Company, Chartered Accountants, as its
principal independent registered public accounting firm effective May 9, 2007.
Concurrent with this appointment, Dohan and Company, Certified Public
Accountants ("Dohan and Company") resigned as the principal independent
registered public accounting firm of the Company effective May 9, 2007. The
decision to change the Companys principal independent registered public
accounting firm has been approved by the Companys board of directors.

During the period of Dohan and Companys engagement as our
principal independent registered public accounting firm from January 25, 2006 to
May 9, 2007, there were no disagreements between the Company and Dohan and
Company on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements if not resolved
to the satisfaction of Dohan and Company would have caused them to make
reference thereto in their report on the Companys audited consolidated
financial statements.

We provided Dohan and Company with a copy of the foregoing
disclosures and requested in writing that Dohan and Company furnish it with a
letter addressed to the Securities and Exchange Commission stating whether or
not they agree with such disclosures. The Company received the requested letter
from Dohan and Company wherein they have confirmed their agreement to the
Companys disclosures. A copy of Dohan and Companys letter has been filed as an
exhibit to our Current Report on Form 8-K dated May 8, 2007.

ITEM 9A(T).   CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of December 31, 2008 (the Evaluation Date). This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed below.

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in this report, we believe that our financial statements contained in
our Annual Report on Form 10-K for the year ended December 31, 2008 fairly
present our financial condition, results of operations and cash flows in all
material respects.

Management's Annual Report on Internal Control over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those
policies and procedures that: (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of its
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in
the effectiveness of any system of internal control, and accordingly, even
effective internal control can provide only reasonable assurance with respect to
financial statement preparation and may not prevent or detect material
misstatements. In addition, effective internal control at a point in time may
become ineffective in future periods because of changes in conditions or due to
deterioration in the degree of compliance with our established policies and
procedures.

---

A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in there being a more than remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, management conducted an
evaluation of the effectiveness of our internal control over financial
reporting, as of the Evaluation Date, based on the framework set forth in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its evaluation under
this framework, management concluded that our internal control over financial
reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Companys internal
control over financial reporting as of the Evaluation Date and identified the
following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate
number of personnel to properly implement control procedures.

Insufficient Number of Directors to form a Functioning Audit
Committee:We only have two directors on our Board of Directors and while
they are both outside directors this is not considered sufficient to have a
functioning audit committee, resulting in ineffective oversight in the
establishment and monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and
will (1) continue to use third party specialists to address shortfalls in
staffing and to assist the Company with accounting and finance responsibilities,
(2) increase the frequency of independent reconciliations of significant
accounts which will mitigate the lack of segregation of duties until there are
sufficient personnel and (3) consider appointing outside directors and audit
committee members in the future.

Management, including our Chief Executive Officer and Chief
Financial Officer, has discussed the material weakness noted above with our
independent registered public accounting firm. Due to the nature of this
material weakness, there is a more than remote likelihood that misstatements
which could be material to the annual or interim financial statements could
occur that would not be prevented or detected.

This Annual Report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report in this annual report.

Changes in internal control over financial reporting

As of the Evaluation Date, there were no changes in our
internal control over financial reporting that occurred during the fiscal year
ended December 31, 2008 that have materially affected, or that are reasonably
likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and
procedures

Our management, including our Chief Executive Officer and Chief
Financial Officer, do not expect that our controls and procedures will prevent
all potential errors or fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met.

ITEM 9B.      OTHER
INFORMATION.

Not applicable.

ITEM 10.      DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF
THE EXCHANGE ACT.

Our current executive officers and directors are:

|Name                | Age | Position                                                 
|------------------- | --- | ---------------------------------------------------------
|Sir John Baring (1) | 62  | Chairman of the
      Board of Directors                 
|Ross Wilmot (1)     | 66  | Director                                                 
|Wayne Smith         | 53  | Chief Executive
      Officer and Chief Financial Officer

(1) ****Member of
our Audit Committee and our Compensation Committee

---

Set forth below is a brief description of the background and
business experience of each of our executive officers and directors for the past
five years:

Sir John Baring was appointed Chief Executive Officer
and director to the board of directors (the Board) on May 26, 2005. Following
the appointment of Mr. Jervis as Chief Executive Officer on October 17, 2005,
Sir John was appointed Chairman of the board. Sir John brings more than 30 years
of banking and investing experience to management. Since June 2002, Sir John has
acted as a managing and founding member of Mercator Management LLC, a leading
fund management company.

Ross Wilmot was appointed director on August 19, 2005.
Mr. Wilmot is a Chartered Accountant and for the past ten years has provided
independent financial consulting services. In addition to serving on the board
of Arvana, Mr. Wilmot serves the following public companies, CTF Technologies
Inc., Orex Minerals Inc., Orko Silver Corp., and Verb Exchange Inc. He is a
director in all of the companies and Chief Financial Officer in Orex Minerals
Inc. and Orko Silver Corp. Mr. Wilmot is the Chairman of the audit
committee.

Wayne Smithhas been the Chief Financial Officer since
May 8, 2007, and the Chief Executive Officer since December 7, 2007. Prior to
working for the Company, Mr. Smith worked for Visiphor Corporation as Chief
Operating Officer and Chief Financial Officer from July 2003 through January
2007. Prior to that time, he served as Visiphors Chief Financial Officer from
September 2002 to July 2003, and began with Visiphor in May 2002. Since 1997,
Mr. Smith has also been a partner of TelePartners Consulting Inc., a consulting
services company that provides management and financial consulting services.
From May 2002 to September 2002, Mr. Smith served as comptroller of
International Portfolio Management. From October 2001 to May 2002, Mr. Smith was
a risk management advisor of Peter Reimer & Associates. From 1997 to July
2001 Mr. Smith was an Audit Senior of Amisano Hanson Chartered Accountants. Mr.
Smith holds a Chartered Accountants designation in Canada.

Each of our directors was appointed as a director at our annual
meeting of shareholders on July 24, 2006. Each member of our board of directors
is elected annually and holds office until the next annual meeting of
shareholders or until his or her successor has been elected or appointed, unless
his or her office is earlier vacated in accordance with our bylaws. Our officers
serve at the discretion of our board of directors and are appointed annually.

Audit Committee and Audit Committee Financial Expert

Our board of directors has established an audit committee that
is comprised of Sir John Baring and Ross Wilmot.

Our board of directors has determined that Mr. Wilmot qualifies
as an audit committee financial expert, as defined by the rules of the SEC.
Our board of directors has further determined that Mr. Wilmot and Sir John are
independent as that term is defined in Rule 121 of the American Stock Exchange
(AMEX) listing standards.

The audit committee recommends independent accountants to audit
its financial statements, discusses the scope and results of the audit with the
independent accountants, considers the adequacy of the internal accounting
controls, considers the audit procedures of the Company and reviews the
non-audit services to be performed by the independent accountants.

The audit committee currently consists of only two members as
the board of directors does not currently have more than two independent
directors. We are actively seeking an additional independent director to be
appointed to the board of directors and the audit committee.

Code of Ethics

We have adopted a Code of Ethics that applies to all the
Companys directors, officers and employees. A copy of our Code of Ethics was
incorporated by reference in our previously filed Form 10-KSB for fiscal 2007 as
an exhibit.

Significant Employees

We do not have any other significant employees, other than our
directors and executive officers named above.

---

Compliance with Section 16(a) of the Securities Exchange
Act

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than ten percent
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file. Based on our review of the copies
of such forms received by us, we believe that during the fiscal year ended
December 31, 2008 all such filing requirements applicable to our officers and
directors were complied with, except as set forth below:

Name and Principal Position
    Number of Late Reports
    Transactions Not Timely
      Reported
    Known Failures to File a
      FormWayne Smith, CEO
      and CFO
    Nil
    Nil
    NilTeyfik Oezcan, former Director and former CEO
    Nil
    Nil
    NilRoss Wilmot,
      Director
    Nil
    Nil
    NilKaren Engleson, former Corporate Secretary and
      former CFO
    Nil
    Nil
    NilBrulex ( formerly greater than 10% Shareholder)
    Nil
    Nil
    One


ITEM 11.      EXECUTIVE
COMPENSATION.

Summary Compensation Table

The following table sets forth certain compensation information
for:

- Teyfik Oezcan, our former chief executive officer,
- Wayne Smith, our chief executive officer and chief financial officer,
- Karen Engleson, our former chief financial officer and former corporate
  secretary,

One former executive officer of the Company earned total annual
salary and bonus exceeding $100,000 during the fiscal year ended December 31,
2007.

Name and Principal
      Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock Awar
      ds ($)
    Option
      Awards ($)
    Non- Equity
      Incenti ve Plan Compe n-sation
      ($)
    Non- qualified
      Deferred Compen- sation
      Earnings ($)
    All Other
      Compen- sation ($)
    Total
      ($)Teyfik Oezcan, former President and former
      Chief Executive Officer(1)
    2008 2007 2006
    Nil $229,544(1)$6,500
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil $229,544 $6,500Wayne Smith, Chief Executive Officer and
      Chief Financial Officer(2)
    2008 2007 2006
    $83,671 $26,707 Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    $83,671 $26,707 NilKaren Engleson, Former Chief Financial
      Officer and former Corporate Secretary(3)
    2008 2007 2006
    Nil $12,919 Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil $89,000
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil $12,919 $89,000


---

|(1) | Mr. Oezcan was appointed president and chief executive
      officer on December 20, 2006 and held this position until December 7,
      2007. His contract called for an annual salary of 180,000 euro. The pro-
      rated amount he was paid for the period until December 7, 2007 was 168,164
      euro ($229,544 USD).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                              
|(2) | Mr. Smith was appointed as our chief financial officer on
      May 8, 2007 and our chief executive officer on December 7, 2007.                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                              
|(3) | Ms. Engleson was appointed as our corporate secretary in
      October 2005. She was also appointed as acting chief financial officer on
      March 14, 2007 and held this position until May 8,
2007.                                                                                                                      

Outstanding Equity Awards as of December 31, 2008

The following table summarizes the outstanding equity awards as
of December 31, 2008 for each of our named executive officers:

Option
        Awards
      Stock
        AwardsName
      Number of Securities Underlying Unexercised
        Options (#) Exercisable
      Number of Securities Underlying Unexercised
        Options (#) **Unexercisable**
      Equity
        Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
      Option Exercise Price ($)
      Option Expiration Date
      Number
        of Shares or Units of Stock
        That Have Not Vested (#)
      Market Value
        of Shares or Units of Stock That Have Not
        Vested ($)
      Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other
        Rights That Have Not Vested
        (#)
      Equity Incentive Plan
        Awards: Market or Payout Value
        of Unearned Shares, Units or Other Rights That Have Not
        Vested ($)Teyfik 
        Oezcan
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/AWayne 
        Smith
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/AKaren 
        Engleson
      66,667(1)
      33,333(1)
      N/A
      $1.25
      December 
        31, 2009
      N/A
      N/A
      N/A
      N/A


(1)      Unvested options vest as to
one-third on each of January 1, 2007, January 1, 2008 and January 1, 2009.

No share purchase options were granted to or exercised by our
named executive officers during our fiscal year ended December 31, 2008.

Long-Term Incentive Plans

We do not have any long-term incentive plans, pension plans, or
similar compensatory plans for our directors or executive officers.

Change of Control Agreements

We are not party to any change of control agreements with any
of our directors or executive officers.

---

Compensation of Directors

The following table summarizes the compensation of our
companys directors for the year ended December 31, 2008:

Name(1)
    Fees Earned or
      Paid in Cash ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non- Equity
      IncentivePlan Compen -sation
      ($)
    Non- qualified
      Deferred Compen- sation
      Earnings ($)
    All Other
      Compen- sation ($)
    Total
      ($)Sir John Baring
    $0
    $0
    $0
    $0
    $0
    $0
    $0Ross Wilmot
    $0
    $0
    $0
    $0
    $0
    $0
    $0


|1) | Teyfik Oezcan, Wayne Smith and Karen Engleson are not
      included in this table as they are reported as officers or former officers
      of the Company and did not receive additional compensation for their
      service as directors. The Companys standard compensation arrangement for
      directors consists of $5,000 per month payable 50% in cash and 50% in
      shares. The Company has deferred all cash and share payments to directors
      until receipt of additional financing.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Outstanding Equity Awards as of December 31, 2008

The following table summarizes the outstanding equity awards as
of December 31, 2008 for each of our directors:

Option
        Awards
      Stock
        AwardsName
      Number
        of Securities Underlying Unexercised
        Options (#) Exercisable
      Number
        of Securities Underlying Unexercised
        Options (#) Unexercisable
      Equity
        Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
      Option Exercise Price ($)
      Option Expiration Date
      Number
        of Shares or Units of Stock
        That Have Not Vested (#)
      Market Value
        of Shares or Units of Stock That Have Not
        Vested ($)
      Equity Incentive
        Plan Awards: Number of
        Unearned Shares, Units or Other
        Rights That Have Not Vested
        (#)
      Equity Incentive Plan Awards: Market or Payout
        Value of Unearned Shares, Units
        or Other Rights That Have Not Vested ($)Sir John 
        Baring
      100,000
      50,000(1)
      N/A
      $1.25
      December 
        31, 2009
      N/A
      N/A
      N/A
      N/ARoss 
        Wilmot
      100,000
      50,000(1)
      N/A
      $1.25
      December 
        31, 2009
      N/A
      N/A
      N/A
      N/A


|1) | Teyfik Oezcan, Wayne Smith and Karen Engleson are not
      included in this table as they are reported as officers or former officers
      of the Company and did not receive additional compensation for their
      service as directors.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                              
|2) | Unvested options vest as to one-third on each of January
      1, 2007, January 1, 2008 and January 1, 2009.                                                                                                                                 

No share purchase options were granted to or exercised by our
directors during our fiscal year ended December 31, 2008.

---

ITEM 12.      SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.

Security Ownership

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as at April 28, 2009
by: (i) each of our directors, (ii) each of our executive officers, (iii) our
executive officers and directors as a group, and (iv) each beneficial
shareholder known to us to own more than 5% of our outstanding common stock.
Unless otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Title of Class
    Name and Address of Beneficial
      Owner
    Number of Common Shares
    Percentage of Common
      Shares(1)Directors and OfficersCommon Stock
    Wayne Smith, CEO and CFO 11C-1015 Ironwork
      Passage Vancouver, BC V6H 3R4
    Nil
    NilCommon Stock
    Sir John Baring, director (2)
      328 Arcadia Drive Ancramdale, New York 12503
    392,500
    2.0%Common Stock
    Ross Wilmot, director(3)
      13548 19thAvenue South Surrey B.C. V4A 6B4
    263,125
    1.4%Common Stock
    All Directors and Executive
      Officers as a Group (3 persons)
    655,625
    3.4%5%
      ShareholdersCommon Stock
    N/A
    N/A
    N/A


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on April 28, 2009. The percentage calculations
      are based on the aggregate of 17,660,675 shares issued and outstanding as
      at April 28, 2009 plus 1,600,000 options that are eligible to be exercised
      on January 1, 2009 for a total of 19,260,675 shares.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(2) | Includes 292,500 common shares held in the name of Sir
      John Baring, and 100,000 shares issuable pursuant to the Companys stock
      option plan exercisable within 60 days of April 28, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(3) | Includes 163,125 common shares held in the name of Ross
      Wilmot, and 100,000 shares issuable pursuant to the Companys stock option
      plan exercisable within 60 days of April 28, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

Change of Control

We are not aware of any arrangement that might result in a
change in control in the future.

---

Equity Compensation Plan Information as at December 31, 2008

Plan Category
    Number of securities to be
      issued upon exercise of outstanding options.
    Exercise price
    Number of securities remaining
      available for future issuance under equity
      compensation plansEquity compensation plan approved by security
      holders
    1,600,000
    $1.25
    1,400,000Equity compensation plans not approved by security
      holders
    N/A
    N/A
    N/A1,600,000
    $1.25
    1,400,000


ITEM 13.      CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS.

Except as described below, none of the following persons has
any direct or indirect material interest in any transaction to which we were or
are a party during the past two years, or in any proposed transaction to which
we propose to be a party:

|(A) | any director or officer;                                                                                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                       
|(B) | any proposed nominee for election as a
director;                                                                                                                                                      
|    |                                                                                                                                                                                                       
|(C) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our common
      stock; or                                              
|    |                                                                                                                                                                                                       
|(D) | any relative or spouse of any of the foregoing persons,
      or any relative of such spouse, who has the same house as such person or
      who is a director or officer of any parent or
subsidiary.

Amounts Due to Related Parties

At December 31, 2008, amounts due to related parties included
$63,600 owed by us to Ross Wilmot and $60,000 owed by us to Sir John Baring,
both directors of the Company. A former director of the Company was owed $12,500
by us. Wayne Smith, the Companys CEO and CFO, was also owed $6,979. At December
31, 2008, $16,420 was owed to the former Chief Financial Officer and Corporate
Secretary and $22,988 was owed to the former President / Chief Executive
Officer. The Corporate Secretary of Arvana Networks Inc. was owed $13,995 at
December 31, 2008. These amounts are unsecured, non-interest bearing and payable
on demand.

Brulex  Consultadoria Economica E Marketing Ltda.

On August 9, 2006 the Company, Brulex  Consultadoria Economica
E Marketing Ltda. (Brulex) and Hallotel Deutschland GmbH (Hallotel) entered
into a share purchase agreement (the Share Purchase Agreement) pursuant to
which the Company acquired control over Hallotel through the acquisition (the
Acquisition) of all of the outstanding shares of BCH Beheer B.V., a
wholly-owned subsidiary of the Vendor that owned all of the outstanding shares
of Hallotel. The purchase price for the Acquisition was paid by way of:

| | iv. | the issue of 3,541,700 shares of common stock of the
      Company, valued at $0.40 per share;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | v.  | the payment of €500,000 ($639,700) in cash; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | vi. | the issuance of a promissory note in the principal amount
      of €250,000 provided that the promissory note will not be payable and will
      be deemed cancelled if certain information as set out in the Share
      Purchase Agreement to be delivered by Brulex to the Purchaser within 30
      days of the closing of the Acquisition relating to certain assets was not
      delivered or, if delivered, did not materially conform with information
      provided to the Company as at the date of the Share Purchase
    Agreement.

Pursuant to the Share Purchase Agreement, the purchase price
was increased by:

| | i.   | a payable to Brulex in the amount of €80,932 for the
      price actually paid by Hallotel for any telephone technology hardware or
      software assets acquired after October 19, 2005 and before the closing
      date of the Acquisition that are required for the provision of established
      Hallotel services to its customers; and
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | iii. | a payable to Brulex in the amount of €277,630 for
      commissions paid by Hallotel to its salespersons in respect of carrier
      pre- select sign-ups on net new customers after October 19, 2005 and
      before the closing date of the Acquisition, as provided in the Share
      Purchase Agreement.                                 

---

Prior to the acquisition date, Arvana had paid $26,941 for
acquisition related expenses and this amount was included in the purchase price.
A transaction fee was paid by issuing 208,300 additional shares of common stock
of the Company, valued at $0.40 per share.

The purchase price of the transaction, with a deemed value of
$2,948,003 was allocated as to $105,659 in cash, $1,080,529 in accounts
receivables, $15,371 in other current assets, $1,368,845 in accounts payable and
accrued liabilities and, $2,605,499 to the value of monthly subscribers held by
Hallotel at the time of the acquisition. Equipment valued at $500,915 and
software valued at $8,875 was held by Hallotel on the acquisition date.

On December 7, 2007, the Company entered into a settlement and
share purchase agreement with Brulex to dispose of the Companys subsidiary,
Hallotel. Under the terms of the agreement Brulex returned to the Company for
cancellation the 3,541,700 of its common shares issued for the acquisition of
BCH Beheer and Hallotel. The shares were valued at $283,336 based on the
Companys common share price of $0.08 on December 7, 2007. The amounts due to
Brulex under the terms of the original Acquisition were reduced by $447,116 to
€225,000. The Company wrote off a receivable due from Hallotel in the amount of
$74,913 as well as software retained by Hallotel in the amount of $64,104. The
original investment in Hallotel by the Company of $2,948,003 was adjusted by the
effect of Hallotels operations from acquisition to disposal resulting in a net
decrease in the Companys retained earnings of $74,455 and an accumulated other
comprehensive loss of $43,099. The net effect of the above transactions resulted
in a loss of $2,239,014 upon disposal of Hallotel.

ITEM 14.      PRINCIPAL ACCOUNTING
FEES AND SERVICES

The following table sets forth information regarding the amount
billed to us by our independent auditor, Davidson & Company, LLP, for our
last fiscal year and our prior independent auditor, Dohan and Company CPA's PA,
for the previous fiscal year ended December 31, 2007:

Years
        ended December 312008
      2007Audit Fees:
      $35,000
      $25,000Audit Related Fees:
      $10,000
      $18,834Tax Fees:
      $Nil
      $NilAll Other Fees:
      $Nil
      $NilTotal:
      $45,000
      $38,834


Audit Fees

Audit Fees are the aggregate fees billed by our independent
auditor for the audit of our consolidated annual financial statements, reviews
of interim financial statements and attestation services that are provided in
connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-Related Fees are fees charged by our independent auditor
for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported under "Audit Fees." This category comprises fees billed for independent
accountant review of our interim financial statements and management discussion
and analysis, as well as advisory services associated with our financial
reporting.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

Our Audit Committee pre-approves all audit services to be
provided to us by our independent auditors. Our Audit Committees policy
regarding the pre-approval of non-audit services to be provided to us by our
independent auditors is that all such services shall be pre-approved by the
Audit Committee. Non-audit services that are prohibited to be provided by our
independent auditors may not be pre-approved. In addition, prior to the granting
of any pre-approval, our Audit Committee must be satisfied that the performance
of the services in question will not compromise the independence of the
independent auditors.

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ITEM 15.EXHIBITS

The following exhibits are included with this Annual Report on
Form 10-K:

Exhibit Number
      Description of Exhibit3.1
      Articles of Incorporation(1)3.2
      Bylaws, as amended(1)10.1
      Agreement and Plan of Reorganization
          between the Company, Arvana Networks, Inc. and the Shareholders of Arvana
          Networks, Inc. dated August 18, 2005(2)10.2
      Investment Agreement dated
          October 6, 2005 between the Company, Arvana Networks, Inc., Arvana Participações
          S.A., Gloinfo 500 Soluções EM Telemática Ltda. and Paulo
          Messina (3)10.3
      Amendment to Investment Agreement
          signed October 6, 2005 and dated October 4, 2005 between the Company,
          Arvana Networks, Inc., Arvana Participações S.A., Gloinfo
          500 Soluções EM Telemática Ltda. and Paulo Messina(3)10.2
      2006 Stock Option Plan, dated June 5, 20065(5)10.5
      Share Purchase Agreement dated
          August 9, 2006 among Brulex-Consultadoria Economica E Marketing Ltda,
          Turinco Inc. and Hallotel Deutschland GmbH (6)10.6
      Termination Agreement between
          Arvana Inc., Gloinfo 500 Soluções EM Telemática Ltda.,
          Paulo Santos Messina and Lucia Sangiacomo Messina, Arvana Participações
          S.A., Arvana Comunicações do Brasil S. A. and Arvana Networks
          Inc. dated October 31, 2006. (7)10.7
      Regulation D Debt Conversion
          Agreement between Arvana Inc, Arvana Networks Inc, and IPH Horizon LLC,
          dated March 28, 2007(8)10.8
      Settlement and Share Purchase
          Agreement between Arvana Inc, Hallotel Deutschland GMBH, BCH Beheer
          B.V., and Teyfik Oezcan, dated December 7, 2007. (10)10.9
      Settlement and Share Repurchase
          Agreement between Arvana Inc and Brulex- Consultadoria Economica E Marketing
          Ltda, dated December 7, 2007. (10)10.10
      Sale and Purchase Agreement
          of BCH Beheer B.V between Arvana Inc and Nazleal S.A dated December
          30, 2008. (11)14.1
      Code of Ethics (4)16.1
      Change in Registrants Certifying Accountant, dated
          May 8, 2007(9)31.1
      Certification of Chief Executive
          Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the
          Exchange Act (11)32.1
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to Rule
          13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (11)


|(1)  | Previously filed with the SEC as an exhibit to the Companys
        registration statement on Form 10- SB filed with the SEC on May 24, 2000.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                               
|(2)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on August 19, 2005.        
|     |                                                                                                                                               
|(3)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on December 14, 2005.      
|     |                                                                                                                                               
|(4)  | Previously filed with the SEC as an exhibit to the Companys
        Annual Report on Form 10-KSB filed with the SEC on March 31, 2006.       
|     |                                                                                                                                               
|(5)  | Previously filed with the SEC as an exhibit to the Companys
        Quarterly Report on Form 8-K filed with the SEC on June 7, 2006.         
|     |                                                                                                                                               
|(6)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on August 15, 2006.        
|     |                                                                                                                                               
|(7)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on August 15, 2006.        
|     |                                                                                                                                               
|(8)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on May 4, 2007.            
|     |                                                                                                                                               
|(9)  | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on May 8, 2007.            
|     |                                                                                                                                               
|(10) | Previously filed with the SEC as an exhibit to the Companys
        Current Report on Form 8-K filed with the SEC on December 7, 2007.       
|     |                                                                                                                                               
|(11) | Filed as an exhibit to this Annual Report on Form
        10-KSB.                                                                             

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ARVANA INC.

|By:   | /s/
      Wayne Smith                | 
|----- | ------------------------------------ | 
|      | Wayne Smith, Chief Executive Officer | 
|      |                                      | 
|Date: | April 30, 2009                       | 

In accordance with the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|By:   | /s/
      Wayne Smith                                       | 
|----- | ----------------------------------------------------------- | 
|      | Wayne Smith, Chief Financial Officer                        | 
|      | (Principal Financial Officer and
      Principal Accounting | 
|      | Officer)                                                    | 
|      |                                                             | 
|Date: | April 30, 2009                                              | 
|      |                                                             | 
|By:   | /s/
      Sir John Baring                                   | 
|      | Sir John Baring                                             | 
|      | Director                                                    | 
|      |                                                             | 
|Date: | April 30, 2009                                              | 
|      |                                                             | 
|By:   | /s/
      Ross Wilmot                                       | 
|      | Ross Wilmot                                                 | 
|      | Director                                                    | 
|      |                                                             | 
|Date: | April 30, 2009                                              | 

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